US Inflation Faces A Cooling Period; Impact On Global Economy

The global stock market is witnessing a big change in inflation after the US financial market gives signs of a cooling effect. In the past two years, the stock market showed a sharp boost as the inflation report ensured that the condition of the US economy was not the same. Furthermore, the industrial average touched 1200 points during August middle. The increment in the S&P score is over 5%, whereas Nasdaq points increased by over 7%. 

As per Wall Street, the Federal Reserve will face ease amidst such an inflationary situation. Thursday’s readings indicated that US inflation would be cooling down gradually. The results are evident from the changes from September to October. There is an aggressive rise in interest rates to control the prices and the consistent demand. Experts are saying that the Central Bank will keep track of the recent happenings in the stock market, making the hike to be under control. 

In the previous month, the annual inflation rate was about 6.6%. However, October showed a decline in this rate as it went down to 6.3%. It implies that the cooling period has already started. 

Fed meetings are also indicating that the cooling period will bring a boost to the global stock market. Eventually, more investors will likely purchase the stocks and deal for a positive return. FED expects that the hikes will not be as high as the previous times in the December meeting. Compared to 0.75 points, by the end of 2022, it will touch around 0.5 points leading to an improved economy. 

The oil costs experienced a sharp rise with the constant price hike for a few years. But the current crude oil prices ensure that people will have some relief as the increment in October was only 4%. It is very low from the peak rate during Summer and thus implies a favorable indication towards inflation control. 

The costs of energy and food are quite volatile, and no noticeable change exists in October rates. But the increase in the rates is slowing down over the years. So, we can expect a steady decline in the rates of essential food commodities in the upcoming days. 

The price rise in the case of housing and properties is not as much as before. It has brought a prominent impact on the monthly rents, which increased at the lowest rate this October than in the last few months. All these facts are signs that the US is successfully slowing down inflation, leading to a normalized position globally.