Inflation in the United States was 8.3% in April compared to last year and represents a slight drop of 8.5% that had marked the last month. The latter had been the highest record in the last 40 years.
After knowing the price index, Wall street opened lower. It happens that even though the figure represents a setback, it remains at very high levels close to historical ones.
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Ahead of the publication of the report, US President Joe Biden had reaffirmed that “Inflation is their top priority”.
Headache for Biden
The price increase is mixed with a sharp drop in popularityaccording to different private polls, which leaves him in a weak position ahead of this year’s mid-term elections.
“Our economy went from being on the road to recovery to being on the move,” said the president, later adding that the “roots of inflation” are “out of their control”.
Biden supported the Fed’s decision to raise rates and listed initiatives of his own such as raising taxes on the wealthiest, increasing domestic oil production and freeing crude from national strategic reserves to lower energy prices.
The effects of war and the pandemic
The effects of the war in Ukraine and the pandemic have had a direct impact in rising prices around the world, not just in the United States.
This becomes clear when analyzing the data from the Energyfor example. In the last 12 months it increased by 30.3% while gasoline is 43.6% more expensive than a year ago.
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Another item with a lot of commercialization and that also had a strong impact on prices was that of food. In the last year they marked a rise of 10.8%, which constitutes the largest annual increase since November 1980.
This scenario and the concern of the North American government led the United States Federal Reserve (FED) will increase your interest rate to between 0.75-1%. They are tools that Biden requested to try to contain an inflation that threatens in the elections.