empty
10.12.2021 05:57 PM
The rise in US prices confirms the expectation of hawkish signals from the Fed

The previous month was a record for retail prices in the United States for almost 40 years. Rapid and persistent inflation undermines employers' salary funds and increases pressure on the Federal Reserve to tighten monetary policy.

According to the Ministry of Labor, published on Friday, the consumer price index increased by 6.8% (data for the year starting from November 2020 inclusive). The widely watched inflation indicator has risen 0.8% since October, exceeding economists' forecasts and continuing the trend of significant increases that began earlier this year.

The average forecast figures provided for an annual increase of 6.8% and an increase of 0.7% on a monthly basis. The yield on 10-year Treasury bonds declined, futures on the S&P 500 index rose and continue to rise. The dollar fell at the time of the opening of the New York session, as the indicators as a whole turned out to be no worse than expected. But let us recall that these expectations were adjusted to take into account a serious increase in October.

This image is no longer relevant

The increase in CPI reflects a significant increase in most categories. Gasoline, housing, food, and cars contributed the most to the growth compared to the previous month.

These data lead investors to expect that the Fed will accelerate the winding down of its bond-buying program at the final meeting of the central bank this year next week. Governments in most countries are now under increasing pressure to deal with rising inflation as workers spend more at grocery stores and gas stations.

This figure "just puts pressure on the Federal Reserve," Kathy Bostjancic, a chief financial economist at Oxford Economics, said on Bloomberg Television. "This is a very difficult period for them."

Inflation "will remain hot and sticky during the first quarter", she believes.

A faster rate cut would open up an opportunity for the Fed to start raising the benchmark interest rate. At the same time, investors bet on a sharp increase in Fed rates in 2022, pointing out that Friday's data showed a higher chance of slowing inflation, given that the monthly change was less than in October.

Annual CPI growth is expected to be around 7% by 2022.

Core inflation

Excluding food and energy, base prices increased by 0.5% compared to the previous month. Overall, the core consumer price index rose by 4.9% compared to last year, reaching a new 30-year high.

The cost of housing, which is considered the most significant component of the CPI and accounts for about a third of the overall index, increased by 0.5% in November compared to a month earlier.

Compared to the same month last year, the 3.8% increase was the largest since 2007. Housing costs are expected to rise next year as rent increases follow property prices, with a slightly delayed effect.

Furniture, clothing, and airline tickets also contributed to the rise in inflation.

Household consumption increased by 6.4% compared to last year, which is the highest since December 2008. Total spending on food, including away from home, increased by 6.1% compared to a year earlier - the highest since 2008.

Gasoline rose by 6.1% compared to the previous month, which corresponds to the volume of growth in October.

The rental of basic housing and the equivalent rent of owners increased by 0.4% from October.

This image is no longer relevant

As a result of a serious price increase and a tumultuous policy regarding the Ukrainian-Russian conflict, Joe Biden's approval rating fell, which increased political pressure on the administration, forcing the president's entourage to move more actively.

And although the White House has taken some steps - for example, creating a task force on the supply chain - inflationary pressures continue to grow. Rapid inflation is also likely to affect the final size and fate of Biden's Build Back Better bill.

Next year, supply chain problems will continue to drive up prices in the short term, but economists expect this factor to disappear as Americans move to more normal consumption patterns. However, other factors, such as labor shortages and housing costs, can keep inflation at a high level.

According to David McLennan, chief executive officer of Cargill Inc., food prices are also likely to remain high next year.

"I thought that inflation in agriculture and food was temporary. Now I feel less because of the ongoing shortage in the labor markets," McLennan said last month in an interview at the Bloomberg New Economy Forum in Singapore. "This is one of the entrances to the supply chain that we are closely monitoring."

Wages have also been showing growth in recent months, but lagging behind consumption. The average hourly wage may show a nominal increase, but adjusted for inflation, the real level fell by 1.9% in November compared to a year earlier. This is the biggest rebound in six months.

Inflation or stagflation?

The growth of a new variant of coronavirus has raised concerns about a double blow to the US economy in the form of slowing growth on the one hand, and still high inflation on the other. While supply chains are collapsing after the collapse, local governments are considering new restrictions, and consumers are assessing not only the health risks in everyday life but also pre-holiday expenses.

And yet, so far, economists see the risk of "stagflation" - that toxic mixture of weak growth and strong inflation, which significantly worsens the prospects for recovery - by only half.

It is obvious that prices are rising more noticeably in the United States than anywhere else, but the growth rate has also turned out to be more stable than politicians expected. Now it is quite difficult to judge how far this growth is from stagnation, and whether it will continue next year at a rate above average, which can push Americans to look for work for several months.

The level of consumption in the United States reached pre-pandemic indicators in the previous reporting periods.

Still, some forecasters have lowered their forecasts for U.S. gross domestic product growth. As we know, the forecasts of Goldman Sachs and other banks for the next year have been regularly declining since spring. And there are no grounds for revision for the better yet: data on travel by US airlines, restaurant visits, and credit card expenses so far do not show obvious changes in recent weeks, since the risk of the Covid-19 threat persists.

But not everyone thinks so.

"We will not see stagflation. We will see an inflationary boom with continued strong growth and price growth rates, which have already prompted the Fed to reorient policy to contain inflation," Glenn Hubbard, chairman of the Economic Council, commented on this. Hubbard served as an advisor to former President George W. Bush and is now a professor of economics at Columbia University.

Median forecasts of economists showed that they expect growth in the United States in 2022 at the level of 3.9% (the forecast repeats the November one).

Federal Reserve policymakers will release their new forecasts next week at a meeting that is expected to begin with a proposal for tougher measures to ensure that inflation remains under control. These forecasts are likely to describe an economy approaching full employment next year and continuing to grow faster than before the pandemic.

The unemployment rate in November at 4.2% is already significantly lower than the level of 4.8% in September and is close to the level of 4%, which is considered sustainable in the long term.

Postcovid-economy

Policymakers may also start raising rates more quickly and approve plans to end current bond purchases in March, rather than in June 2022, as previously planned.

It is still too early to try to understand how the Omicron variant will behave, and how people will tolerate its distribution.

If it turns out to be faster, less dangerous to vaccinate, and as deadly as Delta, it could trigger a new wave of restrictions in some countries and plant closures or travel in others, potentially adversely affecting global growth and jobs.

"Countries simply cannot repeat the big monetary policy push, the big fiscal policy push that they have been able to make over the past two years. This cannot happen again," Gita Gopinath, chief economist at the International Monetary Fund, said at an event in Geneva on Thursday.

If the Omicron option causes a new and serious economic shock, "we will face a real risk of what we have avoided so far, namely stagflation."

But so far, markets, analysts, and economic data do not reflect such a worst-case outcome, partly because markets are tired of being afraid of new strains.

The latter option was first identified in early November. Since then, the weekly number of travelers allowed to fly to the United States by the Transportation Security Administration has remained about the same or slightly higher compared to 2019, as it was earlier in the fall. According to the OpenTable booking website, the volume of personal bookings in restaurants has also not changed.

This indicates that people are striving for greater openness and reduction of quarantine measures, tired of restrictions.

A recent study conducted by researchers at the San Francisco Fed noted what has become the main hope of politicians: American businesses and consumers are "used to the coronavirus."

Egor Danilov,
Analytical expert of InstaForex
© 2007-2025
选择时间框架
5
分钟
15
分钟
30
分钟
1
小时
4
小时
1
1
通过InstaForex赚取加密货币汇率变动的收益。
下载MetaTrader 4并开启您的第一笔交易。
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

推荐文章

當投資者在各行業間重新平衡時,波音上升,Best Buy下跌

百思買的股票下跌,因為公司裁減了全年的銷售和收益預測。另一方面,由於其首席執行官宣布計劃提高737 MAX的生產,波音公司的股票價格上漲。

13:49 2025-05-30 UTC+2

5月30日美國市場新聞摘要

S&P 500 指數在開盤時呈上升走勢,但不久後轉跌,因官員澄清先前被推翻的關稅仍將維持,直至上訴程序結果出爐。這削弱了投資者早期的樂觀情緒。

Ekaterina Kiseleva 12:20 2025-05-30 UTC+2

波音上漲,Best Buy下跌:為什麼投資者選擇不同資產下注

週四,美國股市上漲,受益於Nvidia最新財報的強勁表現,同時投資者消化了一項深夜法院的裁決,該裁決恢復了前總統唐納·特朗普的廣泛貿易關稅。 聯邦上訴法院推翻貿易法院的一項最近決定,該決定試圖立即阻止徵收關稅。

Thomas Frank 10:10 2025-05-30 UTC+2

5月29日美國市場新聞摘要

市場對美國國際貿易法院的裁決作出反應,該裁決認為特朗普政府的關稅措施超出了其權力範圍。此決定為S&P 500帶來了新的不確定性,因為投資者正在評估關稅回撤的潛在影響。

Ekaterina Kiseleva 11:15 2025-05-29 UTC+2

股市風暴:Nvidia 股價飆升,道瓊指數下跌,法院推翻特朗普關稅

美國股市指數週三收盤呈下跌態勢,投資者正在消化聯邦儲備局最新政策會議發出的新信號,與此同時,芯片相關股票在交易末段受到了打擊。 Nvidia(NVDA.O)股票在盤後交易中跳升5%,因為季度收入優於預期。

Thomas Frank 10:49 2025-05-29 UTC+2

從Nvidia到小米:當今股票市場增長與衰退的推動因素

週二,美國股市大幅上漲,受益於投資者對風險的重新興趣,這是因為特朗普總統意外暫停貿易威脅,以及消費者信心的急劇上升。 三大美國指數收盤均上升,科技股重的納斯達克指數領漲,受益於“七大奇蹟”——一群專注於人工智能的科技巨頭推動市場動力。

Thomas Frank 12:06 2025-05-28 UTC+2

不冒著經濟衰退風險的人無法減少國家債務?交易者日曆:5月29日至31日

成為全球關注的焦點並「決定地球的命運」——這是Donald Trump最為享受的事情。對於他來說,不斷地製造頭條新聞並使市場動盪不安,而媒體則充斥著最新消息,這是至關重要的。

Svetlana Radchenko 11:47 2025-05-28 UTC+2

5月28日美國市場新聞摘要

S&P 500指數突破了關鍵的5,908點位,這標誌著近期修正的結束,並為進一步的上升打開了空間。若突破5,998的阻力位,將為漲勢提供額外的動力。

Ekaterina Kiseleva 11:25 2025-05-28 UTC+2

5月27日美國市場新聞摘要

美國總統唐納德·特朗普宣布對歐盟進口商品徵收50%關稅,但金融市場的反應較為克制。投資者越來越多地採取“威脅與撤退”策略,看到大膽聲明(經常未能實現)後反而買入股票。

Ekaterina Kiseleva 11:54 2025-05-27 UTC+2

焦點在Nvidia:市場期待季度報告,美元接近連續第五個月下滑

週二,股市出現不同的動態,因為唐納德·特朗普意外推遲了對來自歐盟的商品徵收50%關稅的計劃。此舉只增加了對前美國總統貿易策略的不確定性,也導致了投資氣候的動盪。

Thomas Frank 11:31 2025-05-27 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.