D.he inflation in the United States accelerated further from a high level in December. The rate of price increase was 7 percent, as the Department of Labor announced in Washington on Wednesday. This is the highest inflation rate since 1982. Professional market observers had expected this development. Compared to the previous month, consumer prices rose by 0.5 percent, an increase of 0.4 percent had been forecast.
The rate is thus even more clearly above the Federal Reserve’s inflation target of two percent. The monetary authorities want to get out of their bond purchases by March to support the economy. Some central bank directors have already signaled an initial rate hike for March. “The current high inflation rate is grist to the mill for those US central bankers who want to see an accelerated exit from the monetary policy crisis mode,” said economist Bastian Hepperle from the private bank Hauck Aufhäuser Lampe.
Thomas Gitzel from VP Bank commented: “You can’t and don’t want to get used to the high inflation rates. It has to be a temporary matter, otherwise the American economy would have a long-term problem. “The good news is that in the coming months, the US inflation rate will” go into reverse, even without the intervention of the US Federal Reserve. ” In his opinion, this is solely due to the decreasing base effect in energy prices. “So the question is not whether inflation rates will fall, but at what level they will settle.”
Dirk Chlench from LBBW also predicts easing upward pressure on prices. “However, the accelerated wage increases in view of the low unemployment rate are likely to stand in the way of a clear relaxation on the price front. For the full year 2022 we expect consumer prices to rise by 5.0 percent compared to the previous year. ”This means that for the second year in a row, inflation will be well above the inflation target of the US Federal Reserve. However, since the monetary authorities have given up their position of dismissing the high inflation rates as a temporary phenomenon, “we are now expecting four US key rate hikes for the current year, each by a quarter of a percentage point”.