Corporate leaders like Jamie Dimon and Elon Musk are intensifying warnings about US inflation, which hit 40 years high landmark in May.
Americans are dealing with spiking costs of the basics like food, utilities and energy, while gasoline is hovering near the unthinkable $5 per gallon. On June 10, U.S. inflation has so far continued the upward trend, coming in at 8.6% year-over-year.
The consumer price index (CPI) rose 8.6% in May from a year ago with fuel up 106.7% over the past year. Excluding food and energy prices, the core CPI went up 6% year over year with 0.6% on a monthly basis. The Federal Reserve is trying for interest rate hikes to cool off the economy without crashing it. There’s a very high likelihood of multiple 50 basis point interest rate hikes ahead.
The current global mean inflation is 7.9% YoY compared to the previous year’s 3.05% is evidence that inflation has become a global phenomenon besides the USA. Russia’s invasion of Ukraine has caused inflation to be stubbornly persistent worldwide which is a big add-on from the previous covid related economic slowdown, already high energy prices, and supply chain clogs.
Russian bombing, blockades, and seizures have cut off the flow of grain from Ukraine which is one of the top producers in the world. In seven eastern European nations, the inflation rate is now expected to cross double-digit figures.
In UK inflation is hovering near 9%, in Brazil at 12.1%, in India at 7.5%, in South Africa at 5.9%, and in Russia at 17.8%.
Central banks in the United States, Britain, Australia, and India have all recently moved aggressively to contractionary economic policy raising their policy interest rate.
Inflation is clearly not only a concern in the US right now, but it has also turned into a global phenomenon – we’re all in the same boat.