US inflation rate slows but remains close to a 40-year high.

Consumer prices in the United States were 8.3% higher in April than a year earlier. This means that inflation has moderated somewhat compared to March (8.5%), but not as much as had been hoped. Core inflation, excluding food and energy, fell from 6.5% to 6.2%.

Expensive food and fuel continue to push up prices, according to figures released by the US Department of Commerce on Wednesday. Economists had expected inflation of 8.1% for April, according to a poll by Bloomberg.

Interest rate hikes

To curb inflation, the US central bank system has already raised interest rates twice. Last week, the Federal Reserve moved 50 basis points above the key rate, the largest increase since 2000.

This means that the rate is now at 0.75 to 1%. The institution will also start phasing out its bond portfolio next month.

Chinese lockdowns

In addition, a number of important causes of inflation have not disappeared.

For example, Chinese corona lockdowns are still hindering the recovery of the supply chain in many sectors.?

Food prices

The underlying figures show that consumer prices in the United States are rising across a broad front. All kinds of foods have risen in price, such as eggs (+22%), meat (+14%), and coffee (+14%).

But also airline tickets (+33%), furniture (+15%) and health insurance (+10% ).

Among the few items that have become cheaper are smartphones (-16%) and tickets to sports matches (-9%).

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Wealtheon Asset Management | 12/05/2022

Source: Financial Times | Bloomberg | US Bureau Labor Statistics | Macrobond | Refinitiv

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