US consumer prices report showed that they increased substantially in February. Rental housing costs remain pretty high, contributing to the growth. Even though the last several reports showed that the American economy remains resilient, the government and analysts are worried about the sticky inflation plaguing the citizens over the months since the coronavirus pandemic. While the latter is already in the past, the damage wrought by lockdowns, restrictions, and disruptions in various delivery chains had long-lasting results.
Moreover, inflation isn’t only the United States problem. Prices of goods and services are rising all over the world. The US Federal Reserve started tightening its policy to counteract the soaring prices. But some experts fear continuously hiking interest rates and maintaining them at their peak will trigger another economic recession.
After several positive data proved that America remained strong in this regard, analysts expected the central bank to deliver several additional rate increases. However, that was before the failure of two major regional banks caused turmoil in the country. Silicon Valley Bank (SVB) collapsed along with Signature Bank on Sunday. On the heels of this news came the report about US CPI, showing that inflation is still strong in the country.
Experts have contradicting forecasts about the Fed’s plans. Some expect the agency to increase interest rates next week to hinder the soaring inflation. Meanwhile, others think that the Fed won’t continue hiking, considering that it had to step in to mitigate damage after SVB’s collapse. On Monday, the central bank officials announced they would make deposits available for the Silicon Valley Bank’s customers.
A new report showed on Tuesday that the Consumer Price Index jumped by as much as 0.4% last month. According to the Labour Department’s data, it gained 0.5% in January.
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