Inflation in the US, highest in 41 years

The long-awaited US inflation reading saw the light of day and shocked by the highest level of price growth in 41 years. 8,6% is the fastest rate of price increases on an annual basis since December 1981.

Inflation in the US higher than expected 

The market consensus assumed publication at 8,3%. Two factors seem to be the main reason for breaking expectations: energy prices and food prices. In May, energy increased by 34,6%, the highest price since September 2005. Food, in turn, rose by 10,1%, the first double-digit increase in prices since March 1981.

Core inflation, ie excluding food and energy prices, amounted to 6,0% in May. This result slightly exceeded the market consensus of 5,9%. In this case, the peak of inflation was in March 2022, when the base price index was 6,5%. Since then, we have been able to observe a decline in this measure of inflation.

The market therefore got two divergent readings. On the one hand, the local record of consumer inflation, and on the other hand, falling core inflation. In this case, the Federal Reserve may mainly affect core inflation, as it has no influence on fuel or food prices.

Inflation data deteriorates market sentiment. After their publication, futures on US indices began to decline. He recorded the biggest reduction Nasdaq xnumx, going back about 1,5 percent. The historical relationship between inflation and indices says that the higher the price dynamics, the worse for the stock markets. This time it may look similar, and for investors it seems important to answer the question of when inflation will reach its peak. Most likely only after the summer season.