The Strategist

U.S. inflation in June reaches 41-year high, exceeds forecasts

07/14/2022 - 09:03

In June, the annual rate of U.S. inflation surpassed economists' expectations and set a 41-year record high of 9.1 percent. Increased pressure on the Fed and the Biden administration results from accelerated price growth.

According to information from the US Labor Department, the U.S. consumer price index increased by 9.1% year over year in June, setting a record that has stood since the end of 1981 for 41 years.

The outcome reflects rising gas, housing, and food prices. Core inflation increased by 0.7 percent from May and 5.9 percent from a year earlier when volatile variables (food and energy) were excluded.

Inflation in June was 8.8% higher than what analysts expected. They anticipate that the U.S. Federal Reserve will have to raise rates once more in order to restrain price growth as a result of rising inflation. The regulator may discuss boosting rates by 0.5 or 0.75 percentage points at its upcoming meeting, the Financial Times reports. The Fed predicted in June that by year's end, the rate may increase to 3.25-3.5 percent, matching the level of 2008.

As support for Democrats in Congress is dwindling, the rate increase before November's midterm elections also puts further pressure on President Joe Biden.