• İstanbul -1 °C
  • Ankara -5 °C

US inflation to remain strong, last longer than expected, S&P says

US inflation to remain strong, last longer than expected, S&P says
High inflation created debate over whether Fed fell behind to start ending accommodative policies, says credit rating agency

By Ovunc Kutlu

ANKARA (AA) – Inflation is expected to remain strong and last longer than initial estimates in the US, according to credit rating agency S&P Global Ratings.

The level of consumer prices will be permanently higher at almost 4%, it said Thursday in a report titled Lasting Effects of Temporary Inflation: Higher Prices, Lower Purchasing Power.

"To the extent that this higher price level is not offset by higher wages, purchasing power will be permanently lower and consumer confidence will likely decline," said the report authored by global chief economist Paul F. Gruenwald.

The consumer price index (CPI) in September was up 5.4% from the same period last year, while the producer price index (PPI) increased 8.6% annually, according to the latest figures of the US Department of Labor.

"While inflation about the Fed's 2% average target was expected, the initial jump in early 2021 was sharper than anticipated and pushed the year-on-year CPI inflation rate to over 5%," the S&P report said. "Moreover, this spike in prices has been more persistent than envisaged, keeping the inflation rate above 5% since mid-year."

The agency said high inflation in the US has created a debate over whether inflation is temporarily higher, or the Fed has fallen behind to start ending its accommodative monetary policies.

The Federal Reserve indicated last month it would make its first interest rate increase at the end of 2022, according to its latest projections released on Sept. 22.

S&P Global Ratings said high price levels cause decline in purchasing power, especially in households.

Consumer confidence and spending are also likely to slow, which will have a negative impact on overall economic growth, but they will also push inflation pressures lower, it added.

source: News Feed
This news is a total 31 time has been read
UYARI: Küfür, hakaret, rencide edici cümleler veya imalar, inançlara saldırı içeren, imla kuralları ile yazılmamış,
Türkçe karakter kullanılmayan ve büyük harflerle yazılmış yorumlar onaylanmamaktadır.
This news yet comment has been added .
Other News
All Rights Reserved © May 2014 US Muslims | Unauthorized and the resources published.
Haber Scripti: CM Bilişim