The growth of the CPI index in the United States for June marks the potential beginning of an inflation wave caused by tariffs, causing the Fed to be cautious in cutting interest rates.

The report shows that the CPI for June increased by 0.3% compared to the previous month, the largest increase since the beginning of the year, with pressure from high commodity prices, but moderate service price increases help alleviate concerns about overall inflation.

MAIN CONTENT

  • The CPI for June in the United States increased by 0.3% compared to the previous month, the strongest increase since the beginning of the year.

  • Commodity inflation rises sharply, raising concerns about price pressure from tariffs.

  • Low service price increases help mitigate the overall inflation impact.

How did the CPI index for June in the United States increase and what does it mean?

The results of the report from the U.S. Bureau of Labor Statistics show that the CPI increased by 0.3% this month compared to the previous month, the highest since January 2024. This reflects rising price pressures, mainly due to the impact of tariffs and commodity prices.

Jinshi, the expert, confirms that this is a warning sign of a prolonged inflation surge, affecting the Fed's monetary policy. Not immediately lowering interest rates may help control this pressure.

The increase in the CPI for June is a clear signal that external factors such as tariffs are increasing inflationary pressures, forcing the Fed to reconsider its monetary policy in the near future.

Jinshi, economic expert, July 15, 2024

How do commodity and service inflation affect the CPI?

Core inflation (core CPI) increased by 0.2% in June, corresponding to a year-over-year increase of 2.9%, mainly due to strong commodity price increases, while service prices only increased slightly.

Service prices such as airfare and hotel rooms are rising slowly, reflecting weak demand, helping to limit the overall CPI increase, easing the burden on consumers.

Is the Fed cautious with interest rate policy due to pressure from CPI?

Rising inflation from tariffs makes it difficult for the Fed to quickly cut interest rates as expected, to avoid exacerbating price pressures. Stability in service price increases provides additional grounds for the Fed to maintain a balanced policy.

The Fed needs to remain highly vigilant regarding CPI developments and price pressures from tariffs, avoiding losing control of inflation in the context of a still volatile economy.

Fed Chairman Jerome Powell, speaking in July 2024

What is the impact of June inflation compared to May and its long-term effects?

The CPI for 2024 continues to rise, with a rate of 2.7% in June, compared to 2.4% in May, indicating inflationary pressures show no signs of rapid decline. This warns of long-term caution in the Fed's monetary policy alongside the influence of future tariff policies.

Comparison table of CPI inflation for May and June 2024

Index May 2024 June 2024 Month-over-month CPI growth (%) 0.1 0.3 Year-over-year CPI growth (%) 2.4 2.7 Year-over-year Core CPI growth (%) 2.8 2.9

Frequently Asked Questions

What is the CPI index and why is it important? The CPI index measures the average price level of consumer goods and services, reflecting inflationary pressures directly on the economy and determining monetary policy. Why did the CPI for June increase more than in May? The main reason is due to soaring commodity prices, under pressure from tariff policies, while service prices have increased slightly. What will the Fed do to control current inflation? The Fed maintains a cautious policy, not rushing to cut interest rates to avoid stimulating too early, in order to curb inflationary pressures. What does slow service price growth mean? This indicates that the demand for service consumption has not strongly recovered, helping to reduce overall price increase pressures and support inflation control. How does rising inflation affect consumers? High inflation reduces purchasing power, increases living costs, and puts financial pressure on households.

Source: https://tintucbitcoin.com/lam-phat-my-6-2024-dung-du-bao/

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