U.S. Inflation Surges to 3.3% in June, Highest Level Since 1991

Key Points

• The Core CPI YoY increased by 3.30% in June 2024, the highest level since 1991.
• The CPI MoM increased by 3.0% from June 2023 to June 2024, the highest level since 1992.
• The CPI YoY increased by 3.30% in June 2024, the highest level since 1991.

Analysis

The latest inflation data shows that the Federal Reserve is facing a difficult challenge in trying to keep inflation under control. The Fed has raised interest rates several times in recent months in an effort to cool inflation, but the latest data shows that these efforts have not been enough.

The Fed is likely to continue raising interest rates in an effort to bring inflation down to its target of 2%. However, it is important to note that raising interest rates can also slow economic growth. The Fed will need to carefully balance its goals of controlling inflation and promoting economic growth.

Market Impact

The latest inflation data has had a negative impact on the financial markets. Stock prices have fallen sharply in recent days, and bond yields have risen. The dollar has also weakened against other currencies.

The markets are concerned that the Fed will need to raise interest rates more aggressively than previously expected in order to bring inflation under control. This could lead to a slowdown in economic growth and a further decline in stock prices.

Conclusion

The latest inflation data is a reminder that the Federal Reserve is facing a difficult challenge in trying to keep inflation under control. The Fed will need to carefully balance its goals of controlling inflation and promoting economic growth.