Previously, economists surveyed by Bloomberg forecast CPI to increase by 8.8% year-on-year and 1.1% month-on-month.
Core inflation, excluding food and energy costs, rose 0.7 percent year-on-year and 5.9 percent year-on-year.
Yields on government bonds and the dollar immediately went up after the latest inflation data was released, while US stocks all fell.
Gasoline prices increased in June, contributing to the increase in CPI.Photo: Reuters.
In June, the price of household essential goods continued to increase compared to the previous month. Gasoline prices increased 11.2%, prices of energy services, including electricity and gas, increased 3.5%, the highest level since 2006. Meanwhile, the cost of food is 1% higher than the month 5 and 10.4% year-on-year in 2021. Rent increased 0.8% last month, the highest increase since April 1986.
The highest inflation in decades means that price pressure continues to put on the economy, negatively affecting purchasing power and consumer confidence. This forces the Fed to be determined to pursue a tightening monetary policy strategy in the coming time to reduce market demand. Rising prices also put political pressure on President Joe Biden and Democrats amid the near-term midterm elections.
Many economic experts believe that inflation peaked in June, some other factors such as high housing costs continue to keep price pressure on in the coming time. Geopolitical risks, including the Covid-19 situation in China and the Russia-Ukraine conflict, pose a threat to supply chains and future inflation prospects.
Previously, Fed officials had signaled a rate hike of 0.75% by the end of July if inflation remained at high levels and the labor market remained “hot”.
According to Bloomberg
Source: Vietnam Insider