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U.S. inflation surge heaps pressure on the Fed
Other - JULY 14, 2021

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U.S. inflation surge heaps pressure on the Fed

by Andrea Zander

U.S. consumer price inflation jumped 0.9 percent month-on-month in June after recording a 0.6 percent gain in May with 0.8 percent increases in April and 0.6 percent in March, reported ING.

This was well ahead of the consensus prediction of 0.5 percent while the core (ex food and energy) also rose 0.9 percent MoM versus the 0.4 percent consensus. Given the strong run of MoM readings over the past few months, it makes it very difficult for the Federal Reserve to stick to its position that inflation is merely “transitory”. Today’s surprise outcome also supports calls for a swifter removal of the massive monetary stimulus the Fed have injected into the economy.

There were 0.3 percent or 0.4 percent MoM component readings throughout, suggesting broad inflation pressures while the bigger gains were once again seen in used car prices (10.5 percent MoM) and new vehicles up 2 percent — consumers have cash in their pockets and rental car companies are looking to rebuild

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