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Friday, June 9, 2023

US Inflation Remains Higher Than Expected

US Inflation Remains Higher Than Expected – Inflation in the United States exceeded experts’ and economists’ estimates for January 2023. On February 14, the United States Labor Department released the Consumer Price Index (CPI), which gauges the worth of goods and services across the country. The rate dropped from 6.5% to 6.4% between December 2022 and January 2023. However, prices went up by 0.5% over the previous year.

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Furthermore, core CPI grew 0.4% month on month and 5.6% year on year. According to the U.S. Labor Department, “The index for shelter was the main contributor to the monthly all-items increase, accounting for almost half of the rise, with food, gasoline, and natural gas indexes also contributing.” The latest inflation report has caused concern among investors that U.S. Federal Reserve Chair Jerome Powell will continue to raise rates.

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The Fed appeared dovish at the most recent Federal Open Market Committee (FOMC) meeting, raising the federal funds rate by only 0.25%. Powell indicated that the Fed has been following the “disinflationary process,” but that it is still early. “There has been an expectation that it will go away quickly and painlessly — and I don’t think that’s at all guaranteed,” said Jerome Powell, the Fed chair, at an event last week.

Stocks, precious metals, and cryptocurrencies all fell somewhat on the Labor Department’s CPI report, but have since recovered. All four U.S. benchmark stock indexes (DJIA, SPX, COMP, RUT) were in positive territory as of 9:30 a.m. Eastern time on Tuesday.

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Similarly, the crypto economy is rebounding after some turbulence following the release of the CPI, and it is up 0.7% today. While silver is down 1.23% at the time of writing, gold has gained by 0.18% per ounce, according to the New York Spot Price on Tuesday.


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