USA leader: inflation goes back faster than in Germany

Von Krypto News Österreich

Titel: Warum die Inflationsrate in den USA schneller sinkt als in Deutschland und Europa Die USA haben es geschafft: Die Inflationsrate ist im Juni auf nur noch 3,0 Prozent gefallen. Damit nähert sie sich dem Ziel der US-Notenbank von zwei Prozent. Im Gegensatz dazu liegt die Inflation in Europa hartnäckig hoch, in Deutschland stieg sie sogar auf 6,4 Prozent im Juni. Doch woran liegt diese große Diskrepanz? Ein entscheidender Faktor ist, dass die Inflation in den USA bereits früher begonnen hat. Die Preise begannen bereits im Jahr 2021 infolge der Corona-Pandemie zu steigen. Lockdowns in vielen Ländern erschwerten die Lieferketten …
Title: Why the inflation rate in the USA drops faster than in Germany and Europe The United States made it: the inflation rate fell to only 3.0 percent in June. In doing so, it approaches the goal of the US Federal Reserve of two percent. In contrast, inflation is persistent in Europe, in Germany it even rose to 6.4 percent in June. But why is this great discrepancy? A crucial factor is that inflation in the United States has started earlier. Prices began to rise in 2021 as a result of Corona pandemic. Lockdowns in many countries make the supply chains difficult ... (Symbolbild/KNAT)

Title: Why the inflation rate in the USA drops faster than in Germany and Europe

The USA did it: the inflation rate fell to only 3.0 percent in June. In doing so, it approaches the goal of the US Federal Reserve of two percent. In contrast, inflation is persistent in Europe, in Germany it even rose to 6.4 percent in June. But why is this great discrepancy?

A crucial factor is that inflation has already started in the United States. Prices began to rise in 2021 as a result of Corona pandemic. Lockdowns in many countries made the supply chains difficult and led to a limited range of goods. At the same time, the US states supported their citizens financially, which led to an increase in consumption.

In March 2021, the inflation rate in the United States first rose over two percent, while this was only the case in the euro zone in July 2021. Inflation in the United States's highlight in June 2022 was 9.1 percent, while in the euro zone it was only reached 10.6 percent in October. Accordingly, inflation in the USA began and reached its peak earlier than in Europe.

The causes of inflation are also different. In the euro zone, energy and food prices contributed more to the increase in inflation according to the European Central Bank (ECB). In contrast, inflation in the United States was more driven by demand. There, wages rose earlier than in the euro area, which increased purchasing power and led to an increase in prices.

Another reason for the difference lies in the different measures of the central banks. The US Federal Reserve started earlier and more aggressive with the increase in interest rates than the ECB. This increased the interest difference between the USA and the euro zone, which made the US dollar stronger compared to the euro. Imports from the dollar space became more expensive, especially in the area of ​​energy, since the billing is mainly done in dollars here.

The influence of currencies also plays a role. In the meantime, however, this effect has been reversed. Since interest rates in Europe are expected to rise longer than in the USA, the interest difference decreases and the euro is gaining strength. In combination with other factors, this will contribute to the fact that inflation will also decrease in Germany and Europe.

There are also strong differences in inflation within the euro zone. Inflation is almost double -digit, especially in the Baltic countries, while it is already less than two percent in Belgium, Spain and Luxembourg. These differences are due to dependencies on Russia in energy and other goods.

Overall, it can be stated that the inflation rate in the USA drops faster than in Germany and Europe. Due to the earlier and more aggressive interest rate policy, the different causes of inflation and the influence of currencies, the United States got inflation under control faster. Nevertheless, there are also signs of falling inflation in Europe and Germany, so that the situation could improve in the near future.