Falling energy prices have led to the lowest inflation rate in the United States for more than two years

Falling energy prices have led to the lowest inflation rate in the United States for more than two years

The inflation rate in the USA fell to the lowest level in June for more than two years. According to the US Ministry of Labor, consumer prices rose by 3.0 percent compared to the same month last year, while they were 4.0 percent in the previous month. The bank economists had expected an average of 3.1 percent. From May to June, prices rose by an average of 0.2 percent, but somewhat weaker than expected. The current inflation rate is therefore the lowest in a little more than two years.

Despite the decline in the overall inflation, the risk of inflation remains, as the development of the core inflation rate shows. This rate, in which the prices for energy and food that are prone to fluctuation are left out, fell to 4.8 percent of 5.3 percent before, but still remains high. The US Federal Reserve FED sees the core rate as a good indicator of the basic inflation trends and strives for an inflation rate of two percent. US Federal Reserve Thomas Barkin commented on the current development and explained that the price pressure was still too high.

The inflation data is currently particularly important because they have a major impact on the monetary policy of the US Federal Reserve. Numerous economists expect the Fed to turn the key interest rate screw again at the end of the month in order to counteract the high price pressure. Economist Bastian Hepperle from Hauck Aufhäuser Lampe Lamp Privatbank AG believes that there is still too much pressure in inflation.

Despite the previous break in the tightening course of monetary policy in June and maintaining the interest margin at 5.00 to 5.25 percent, the head of the New York branch of the FED, John Williams, indicated that the interest summit has not yet been reached. With its projections and in its communication, the FED made it clear that it would still like to pursue a restrictive monetary policy in order to attribute inflation to two percent.