That US Bureau of Labor Statistics has the new inflation numbers in the US for the month of May. The United States is grappling with the highest rate of inflation in 40 years. Year-on-year inflation is now 8.6 percent, beating analysts’ forecasts by 0.3 percent.
The main price drivers here are the areas: housing, food and energy, the authority writes in its statement. The electricity and gas sector grew by 34.6 percent within a year. Food prices increased by 10.1 percent.
The escalating numbers set the US Federal Reserve fed still under pressure. As a result, the central bank already had the policy rate raised by 0.5 percent to try to catch runaway inflation – but so far unsuccessfully. Experts accuse the currency guardian of hesitant behavior. They expect further, more aggressive increases – with negative consequences for the financial markets. Market expert Stefan Lübeck sees the Fed under pressure:
Inflation, which continues to escalate, is likely to prompt the US Federal Reserve to scale back bond purchases even more quickly and consider further interest rate hikes.
The associated shortage of liquidity on the market would have a negative short-term effect on the willingness to invest in technology stocks and cryptocurrencies effect, according to Lübeck.
Inflation is causing turmoil in the financial markets
The first effects are already foreseeable. The announcement of the inflation figures caused restless mood among investors on the global stock exchanges. Both the S&P 500 as well as the Nasdaq 100 lost 2.01 and 2.88 percent respectively compared to the previous day. Also the DAX is now trading below the 14,000 mark again with a loss of 2.53 percent. In the crypto sector, the total market capitalization fell by 3 percent to now $1.26 billion. The announcement by the ECB that it intends to raise the key interest rate for the first time in 11 years already weighed on sentiment.