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USA. Inflation – June 2023. The lowest price increase in two years

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US consumer prices in June 2023 rose 3 percent year-on-year and 0.2 percent month-on-month. Inflation has fallen to its lowest level in more than two years, helped by cheaper used cars.

The price increase was expected to be +3.1%. y/y and +0.3 percent mdm. Inflation core rose by 0.2 percent. m/m and 4.8 percent. y/y +0.3% expected mdm and +5 percent y/y

Inflation has fallen sharply from a peak of over 9 per cent in June 2022, the slowest pace of price growth since March 2021, the BBC reported.

He added that, according to the Department of Labor, the increase in inflation in the US in June was due to higher housing costs. In addition, the prices of used cars and trucks have fallen, as have the costs of food items such as pork, milk and eggs.

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US inflation and interest rates

The data suggests more interest rate increases prevented a sharp rise in prices. But analysts still expect the Federal Reserve (Fed) to raise interest rates again this month.

Fitch Ratings chief economist Brian Coulton said June’s slowdown in US inflation was “actually just a small step in the right direction.”

“In a context of still tight labor markets and stiff wage growth, the Fed’s recent concerns about the persistence of inflation will not go away,” he told the BBC.

‘Inflation may return to more comfortable levels’

– The CPI turned out to be lower than expected in terms of both headline and core inflation, and the markets reacted positively to this report. The implications for monetary policy are clear, the Fed is at or near the end of its rate hike cycle, said Art Hogan, chief market strategist at B Riley Wealth.

– The CPI report reinforces the narrative that inflation may return to more comfortable levels in the coming quarters. We have to look at United States as a leading indicator of what’s going to happen in Europe – there’s no reason to make an exception for Europe, except maybe the UK, said Samy Chaar, Lombard Odier’s chief economist.

Main photo source: Shutterstock

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