On a monthly basis, US inflation accelerated from 0.6 percent. The 0.2% increase was 0.8% when expected. Core inflation (ie calculated without taking into account fuel, energy and food prices) was 3% in April and was expected to rise to 2.3% after reaching 1.6% in March. This is the highest since 1995.
In response to these data, the dollar strengthened 0.5% on Wednesday afternoon. Against the common European currency. The rate is 21 21 1.21 per 1 euro. Appreciated against the dollar slot – the rate broke the PLN 3.76 level against the US dollar. The U.S. 10-year bond yield rose 1.64 percent. Wednesday’s session in New York began with declines. Dow Jones Industrial Average initially lost 0.4 percent.
Central Bank President Jerome Powell has so far argued that the acceleration of inflation is only temporary and therefore it is not the time to tighten monetary policy. The data for the month of April are of course calculated from the lowest base of the year, i.e. from the bottom of the crisis. Since then, the prices of many raw materials have skyrocketed. Crude oil rose more than 100 percent. (34% since the beginning of 2021), copper 156%. And construction trees 337 per cent. According to the Department of Labor, a one-third increase in consumer prices in April was due to a rise in used car prices, which rose by 10 percent. Prices for transportation services have risen sharply since 1975.
– Markets are already anticipating an inflationary acceleration, the big question is how permanent this acceleration will be. We do not know the answers to them and we will not know them for months. However, Seema Shah, chief strategist at Global Global Investors, says markets will be hit by fears of inflation in the coming months and investors need to take some precautions against it.