So far, financial markets have greeted the news of a 5% rise in inflation in the US rather calmly, but if the trend continues, the mood in the Treasury and the US Federal Reserve will change. This was announced to Izvestia by Alexander Abramov, associate professor at RANEPA, on Thursday, June 10.
According to him, the markets were ready for this “rather extraordinary” news. The question is, at what level of inflation will the American regulator decide to raise the base rate, and as soon as they change, this will mean “big movements in the market.”
Now, according to the expert, the rise in inflation is unlikely to lead to one-time dramatic changes, rather, the world will “rethink” this indicator.
Speaking about the possible impact of inflation on the dollar rate, Abramov said that so far this “does not affect financial indicators.”
He added that investor expectations and rising consumer demand in the United States are also “pushing inflation.” According to him, the American side so far explains this, for example, by the shortage of semiconductors and the subsequent rise in prices in the automotive industry.
Everyone hopes that these factors on the part of manufacturers are temporary, and recovery will begin soon, he concluded.
Earlier in the day, the US Department of Labor reported that consumer prices rose 5% on an annualized basis in May, a record since August 2008, when they were 5.3%.
On a monthly basis, the general consumer price index rose 0.8%, while the base index rose 0.7%.
Economists had expected inflation to rise by 4.7% on an annualized basis and by 0.4% on a monthly basis.
It was also noted that car prices rose to record levels previously seen in 2009 and 2011.
Representatives of the US Central Bank attributed the current growth to temporary factors, which should weaken within a year.
In March of this year, Izvestia reported that a shortage of computer boards has hit even the automotive industry, not to mention electronics. The problem turned out to be a shortage of semiconductors, the manufacturers of which were not ready for the coronavirus pandemic and its consequences.