U.S. inflation

Soaring prices a top concern for many Americans, and likely influencing many voters in a midterm election year.

The unemployment rate has held steady at 3.6% – around the same rate as before the pandemic. A slowdown in investments could have a cascading effect on jobs and spending, though it remains too early to predict any recession – not that that has stopped certain people, and banks, from doing so. The Fed’s control of interest rates is its most powerful tool to curb inflation. At the peak of the crisis, ports were clogged with ships trying to dock, containers were falling into the ocean and there was a shortage of truck drivers. As the demand for goods soared, supply remained constrained – because of the infamous supply chain crisis, which is only just now starting to ease. The Federal Reserve, headed by Jerome Powell, has been aggressive in its response to inflation, raising interest rates twice this year.

Markets price in higher chance of 1% rate rise this month after bigger-than-expected jump in prices.

Inflation's relentless surge didn't merely persist in June. It accelerated. For the 12 months ending in June, the government's consumer price index rocketed ...

The IMF foresees 8.7 percent inflation in poorer emerging market and developing countries, the highest such rate since 2008. A recovering job market — employers added a record 6.7 million jobs last year and a healthy average of 457,000 a month so far this year — means that Americans as a whole can afford to keep spending. And some argued that the Fed kept rates near zero far too long, lending fuel to runaway spending and inflated prices in stocks, homes and other assets. The strong job market is boosting workers’ pay, though not enough to offset higher prices. When the pandemic paralyzed the economy in the spring of 2020 and lockdowns kicked in, businesses closed or cut hours and consumers stayed home as a health precaution, employers slashed a breathtaking 22 million jobs. The inflation of the 1970s and early 1980s peaked at 14.8 percent in March 1980 before the Fed exorcized high prices with aggressive rate hikes that caused brutal back-to-back recessions in 1980 and 1981-1982. But instead of sinking into a prolonged downturn, the economy staged an unexpectedly rousing recovery, fueled by vast infusions of government aid and emergency intervention by the Fed, which slashed rates among other things. Now, most economists expect inflation to remain painfully elevated well after this year, with demand outstripping supplies in numerous areas of the economy. Critics blamed, in part, President Joe Biden’s $1.9 trillion coronavirus relief package, with its $1,400 checks to most households, for overheating an economy that was already sizzling on its own. For months, Powell and some others characterized high inflation as merely a “transitory” phenomenon while the economy rebounded from the pandemic recession faster than anyone had anticipated. So the Fed has radically changed course by imposing a succession of large rate hikes. In February 2021, the consumer price index was running just 1.7 percent above its level a year earlier.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.1 per cent, hovering just above the two-year low hit on Tuesday, while US Nasdaq futures shed ...

The US 10-year yield was up around 7 basis points at 2.9817 per cent. it takes time for the monetary policy to affect inflation." Policymakers might consider a 100 basis point increase at the July meeting, Atlanta Federal Reserve Bank President Raphael Bostic said. The dollar index measuring its performance against a basket of currencies was up 0.2 per cent at 108.43, while the dollar was up 1.1 per cent against the yen, at its strongest since 1998. The euro was down 0.3 per cent at $1.00325, having slipped below $1 on Wednesday for the first time since 2002. By early European trading, money markets were pricing in a 54 per cent chance of a full percentage point hike at the July meeting and a 46 per cent chance of a 75 basis point rise.

Asian stock markets have climbed Thursday despite a record-setting U.S. inflation report that pointed to more possible interest rate hikes that investors ...

The euro declined to $1.0035 from $1.0062. The dollar rose to 138.02 yen from Wednesday’s 137.32 yen. Traders are looking ahead to the latest quarterly results from big U.S. companies in the next few weeks. On Wall Street, the S&P fell to 3,801.78. The Dow Jones Industrial Average fell 0.7% to 30,772.79, and the Nasdaq composite dropped 0.2% to 11,247.58. The Kospi in Seoul edged 0.1% higher to 2,330.74. New Zealand and Jakarta advanced while Singapore declined. The Hang Seng in Hong Kong advanced 0.3% to 20,855.29. Apart from the Federal Reserve, central banks in Britain, South Korea and some other countries also have hiked rates to cool surging prices. In energy markets, benchmark U.S. crude gained 54 cents to $96.84 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to $96.30 on Wednesday. Brent crude, the price basis for international oil trading, advanced 67 cents to $100.24 per barrel in London. It added 8 cents the previous session to $99.57 a barrel. The Shanghai Composite Index picked up 0.3% to 3,294.50 while Tokyo’s Nikkei 225 gained 0.7% to 26,665.09. They point to a strong U.S. job market despite higher borrowing costs. Sydney’s S&P-ASX 200 added 0.4% to 6,646.60 after official data showed employment rose more than expected in June. Electronics manufacturer Panasonic Holdings ‘ shares rose 1.1% after the company announced plans for a multibillion-dollar mega-factory to produce electric vehicle batteries for Tesla and other carmakers in the U.S. state of Kansas.

In more bad news for Joe Biden, US inflation has jumped to scary levels led by skyrocketing petrol prices. But it might be the last big hike.

“It rules out the chance of the Fed hiking by only 5 basis points this month”. But Mr Shepherdson noted some signs of cooling prices in the data and predicted “this will be the last big increase.” When volatile food and energy prices are stripped out of the calculation, “core” CPI increased 5.9 per cent over the past year — still a rapid pace but slowing from the pace in May, according to the data. Overall energy prices posted their biggest annual increase since April 1980. Ian Shepherdson of Pantheon Macroeconomics summed up the data in one word: “Ouch.” “This report will make for very uncomfortable reading at the Fed,” he said. US inflation surged to a fresh peak of 9.1 per cent in June, above the 8.8 per cent expected by Dow Jones experts.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat by early afternoon.

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European shares dropped in early trading on Thursday and the safe-haven dollar was up after the latest red-hot U.S. inflation reading increased investor ...

read more it takes time for the monetary policy to affect inflation." Asian shares were stuck at two-year lows and European indexes opened in the red. read more The data was seen as firming the case for the Federal Reserve to raise rates aggressively. read more