Inflation in the US surprisingly remains at a high level

Inflation in the US surprisingly remains at a high level. Goods and services cost 5.4 percent more in July than in the same month last year, according to the Ministry of Labor. Experts had expected a slight decline to 5.3 percent after the inflation rate had climbed sharply to 5.4 percent in June. A similarly high value was last seen in August 2008. Above all, energy prices and corona-related catch-up effects are currently causing sustained inflationary pressure. Bernd Kampen from NordLB referred to energy prices, transport costs, delivery bottlenecks for technical products and raw materials, a 'discharge' of consumer wishes and, in some cases, wage increases as reasons for the sustained upswing. There is no serious answer to "whether the surge in inflation is only a temporary phenomenon, as the Fed assumes". It is gratifying that inflation has not accelerated further, said analyst Bastian Hepperle from Bankhaus Lampe. "The hump in inflation will persist for the time being, as the pandemic-side price upward forces in particular are almost unbroken." Significantly lower rates are only expected from spring 2022. "Patience remains an important virtue of monetary policy." US Treasury Secretary Janet Yellen expects inflation to weaken by the end of 2021. "We expect that the monthly inflation rates would by then fall to a level that is compatible with the price stability interpretation of the US Federal Reserve (Fed)," said Yellen recently. The US central bankers around Fed chair Jerome Powell also expect high inflation to remain a temporary phenomenon. The Federal Reserve continues to support the economy with monthly injections of $ 120 billion. It intends to hold on to bond purchases until substantial progress has been made on price stability and unemployment.