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Refrigerated display case in Arlington, Virginia: Groceries in particular cost more
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MICHAEL REYNOLDS/EPO
Inflation in the USA accelerated more than expected from a high level in January.
Consumer prices rose by 7.5 percent year-on-year, according to the Department of Labor in Washington.
This is the highest inflation rate since 1982. Analysts had expected a rate of 7.3 percent.
In December it was still 7.0 percent.
Inflation was mainly driven by groceries, electricity and rents in January.
On the other hand, petrol prices, which rose sharply in 2021, fell.
In addition to the continuing supply bottlenecks, experts also refer to the tight labor market.
This leads to growing wage pressure.
The price increase is thus well above the inflation target of the US Federal Reserve of two percent.
The Fed has signaled the first interest rate hike in the pandemic for March.
She's getting more and more under pressure.
According to experts, the US Federal Reserve could even raise the key interest rate by a large step of 0.5 percentage points in March.
Financial market indicators also suggest that the Fed could raise interest rates by a total of one percentage point by July.
A half-point hike would be unusual for the US Federal Reserve: it usually leaves it at a quarter of a point.
Most recently, in May 2000, it raised the key interest rate by half a percentage point to 6.5 percent.
Speculation on the market about a significant increase in interest rates
The inflation numbers raise the possibility of more aggressive rate hikes, said Naeem Aslam, chief market analyst at brokerage firm AvaTrade.
He expects a total increase of a full percentage point by July.
The pressure on the Fed to step on the brakes is growing, says economist Dirk Chlench from LBBW: “There is no sign of inflation easing, inflation is rising across the board.
The employees are left with nothing in real terms from their lavish wage increases.«
In March 2020, the Fed lowered interest rates to between 0.00 and 0.25 percent in view of the devastating effects of the corona pandemic on the economy.
A massive $120 billion a month bond-buying program was also launched to support the economy.
The Fed then began scaling back this bond program last November.
sol/dpa-AFX/AFP/Reuters