Growth in the prices of goods and services in the United States accelerated again in December. The last time inflation in the US was this high was in June 1982, when Ronald Reagan held the office of US President in the White House.
December’s year-on-year change in the U.S. consumer price index reached seven percent. The inflation rate was thus 0.2 percentage points higher than in November. This is according to data from the AMERICAN Bureau of Labor Statistics. According to experts, the current figures increase the likelihood that the Federal Reserve will start raising its interest rates as early as March this year.
This view is supported by the fact that core inflation reached 5.5 percent in December and increased faster than overall consumer inflation month-on-month. Core inflation is the one that guides central banks in their monetary policy decisions. Core inflation expresses price movements without the inclusion of administrative price adjustments. Thus, it indicates real inflationary pressures in the economy.
Earlier this week, Federal Reserve Governor Jerome Powell declared the Fed’s readiness to start raising interest rates sooner and more vigorously if the situation so requires.