The most terrified word Inflation seems to be in a controlling phase. Looking into the CPI data the figures are much more satisfying but still unable to beat the forecasted figure. Thus, less than an economist hoped but still good for our economy.
Earlier the inflation rate was 8.5 percent which fell and mark to 8.3 percent. Moreover, the core CPI upsurges to 0.6 percent for the month. However, expected figure was 0.4 percent.
Furthermore, considers being the biggest increase in number for the last three months. Precisely, commenting that inflation is improving bit by bit.
The principal reason of this sudden overshoot was an unexpected volatility in food & energy price action.
Prices for necessities like shelter upswings 0.5 percent which is consistently in a rising mode from last three months. Therefore, accommodation cost now raised and reaches at 5.1 percent for the year.
Moving further, prices for used cars slowed down thereby reaching the percentage from 3.8 percent to 0.4 percent. On the contrary, prices for new cars rose by 1.1 percent. Furthermore, cost for general services upsurges by 0.7 percent including the cost of transportation for both tourism & business travel purposes.
As soon as the data releases, US stock damp down. However, hike in interest rates seems like a prolific effort in curbing the rate of inflation. Moreover. a stiffness in monetary policy brings the inflation down aggressively. Hence, there are rumors all around that in the month of June meet, interest rate may touch it’s another high and raise to 75BSP.
Since, the theory of beating inflation proves true there may be chances of another hike in interest rate in the upcoming FED meets. Therefore, their main focus is to chop down the inflationary periods which thereby heads our economy in a growing path.