US President Biden blamed Russian President Putin for the rise in prices. In May, annual inflation in the USA reached the highest level since December 1981. According to the statement of the US Department of Labor, the increases in gasoline, food and housing prices were effective in the total increase in consumer prices. It is stated that the increase in rents in the USA has reached the highest level since 1990.
Consumer Price Index (CPI) increased by 1 percent monthly in May. CPI, which increased by 0.3 percent in April, was expected to increase by 0.7 percent in May. CPI increased by 8.6 percent on an annual basis in May. The annual increase was 8.3 percent in April, and economists had hoped it would remain the highest annual increase.
It is estimated that the US Federal Reserve (Fed) will continue to raise interest rates by 50 basis points until September. “The Fed now realizes that it is behind the curve in inflation and has to act more decisively,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles. “Stagflation is the most likely scenario in the coming years, and the likelihood of a recession will increase.”
“Putin’s hike”
US President Joe Biden said Washington should take action to ease inflation pressure. Biden, who blamed Russian President Vladimir Putin’s war in Ukraine on February 24, for the increase in prices, used the phrase “Putin’s hike”. “While we continue to do our job of defending freedom in Ukraine, we need to do more, and quickly, to lower prices here in the United States,” Biden said.
Reuters/EC, SSB