Woman in supermarket in San Diego: inflation dam broken?
Photo: Bloomberg / Getty Images
Consumer prices continue to rise in the US - and in March the rate was above the Fed's inflation target of two percent for the first time in a long time.
And that's even clear: inflation rose to 2.6 percent, as the Department of Labor announced in Washington.
The prices climbed by 0.6 percent compared to February - that is the biggest increase since August 2012. That means they have risen more strongly in the USA than in a good eight and a half years.
Compared to March 2020, the rate of inflation rose to 2.6 percent, after having been 1.7 percent in February.
Experts believe it is possible that the inflation rate in the US will climb above the three percent mark in the coming months.
One reason for this is also a statistical effect: A year ago, prices were low due to the Corona recession.
"This development is causing concern in many places," said VP Bank's chief economist, Thomas Gitzel.
"The fear is that an inflation dam has now been broken because of the fiscal and monetary policy aid."
Flight tickets significantly more expensive
In Germany, too, inflation had recently risen sharply.
According to experts, inflation could jump the two percent mark from the middle of the year.
This is supported by the fact that many people in the corona crisis spent less on many things such as travel, restaurants or events.
This could at least partially be made up for.
The Federal Reserve is following developments in their country critically.
Its goal is not only full employment, but also stable prices.
However, it supports the economy hit by the corona crisis with monthly cash injections of $ 120 billion, which can also drive inflation.
The US inflation rate rose above the Fed's two percent mark for the first time since February 2020.
Specifically, according to Gitzel, the significantly higher oil prices compared to the previous year had an impact on inflation - but also all those prices that fell in the wake of the first corona wave, such as those for flight tickets.
Some economists fear that loose monetary policy will not only fuel growth, but also inflation.
The Fed does not yet see such dangers.
In addition, the price development is considered to be prone to fluctuations due to the corona consequences.
apr / Reuters / dpa