Americans are currently suffering through the highest rates of inflation since 1982. In Bloomberg, Reade Pickert discusses the rapid inflation emptying Americans’ wallets today, writing:
U.S. consumer prices rose last month at the fastest annual pace in nearly 40 years, underscoring how rapid and persistent inflation is eroding paychecks and increasing pressure on the Federal Reserve to tighten monetary policy.
The consumer price index climbed 6.8% from November 2020, according to Labor Department data released Friday. The widely followed inflation gauge rose 0.8% from October, exceeding forecasts and extending a trend of sizable increases that began earlier this year.
The median forecasts in a Bloomberg survey of economists called for a 6.8% annual gain and a 0.7% advance in the monthly measure. U.S. stocks rose at the open after the inflation data were broadly in line with expectations compared with surprising to the upside in prior months. The yield on 10-year Treasuries slid and the dollar eased.
The increase in the CPI reflected broad advances in most categories, similar to last month’s report. Gasoline, shelter, food and vehicles were among the larger contributors to the month-over-month increase.
The data reinforce expectations the Fed will accelerate the wind down of its bond-buying program at the central bank’s final meeting of the year next week. Central banks — and politicians — around the world have come under mounting pressure to address rising inflation as workers spend more at the grocery store and the gas pump.
The figure “just keeps pressure on the Federal Reserve,” Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said on Bloomberg Television. “This is a very difficult spot for them.”
Inflation “is going to stay hot and sticky through the first quarter,” she said.
A faster tapering would open the door for the Fed to begin raising interest rates. At the same time, investors pared bets on the steepness of Fed hikes in 2022, indicating Friday’s data showed stronger chances that inflation will slow given the monthly change was smaller than in October.
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