As bottlenecks and other supply chain disruptions intensify and inflationary pressures increase, U.S. consumer prices are expected to soar in October at the fastest rate in 30 years.
The consensus forecast compiled by Bloomberg shows that Consumer price index The U.S. Bureau of Labor Statistics will announce a 5.9% year-on-year growth in October on Wednesday-the fastest annual growth rate since 1990 and a sharp increase from the 5.4% level in September.
The month-on-month price increase is also expected to increase, with an expected increase of 0.6%. Although this is significantly lower than the 0.9% increase reported in May and June, it represents a significant acceleration period from August to September when prices rose 0.4%.
Once excluding volatile items such as food and energy, economists expect a monthly increase of 0.4%, twice the recent reading. On an annual basis, this rate is expected to reach 4.3%. In September, this proportion was 4%.
The upcoming data will reinforce the view that it turns out that inflationary pressures are much longer than originally anticipated-the Fed acknowledged the growing risk when it announced the start of the program last week. Downscaling Later this month, its $120 billion asset purchase plan.
Although the costs of some of the industries most sensitive to the economic reopening brought about by the coronavirus pandemic (including used cars and travel expenses) have fallen in recent months, prices elsewhere are picking up.
In recent months, rents and other housing-related costs (approximately one-third of the CPI) have risen steadily, and certain services have become more expensive as employers raise wages to cope with severe worker shortages.
The increasing mismatch between supply and demand has also pushed up energy prices, and harmful bottlenecks have caused the prices of many commodities, from household items to new cars, to rise sharply.
Senior Fed officials-including Chairman Jay Powell and Vice Chairman Richard Clarida-still believe that with the adjustment of global supply chains and labor markets, today’s imbalances will eventually subside, which means that today’s inflation will eventually It proved to be “temporary” and faded over time.
But Powell and Clarida said that the Fed is closely monitoring the situation and is ready to use central bank tools when necessary.
Eurodollar futures are a popular indicator of interest rate expectations, indicating that the Fed will raise its main policy interest rate around September 2022.