Joe Biden celebrated low inflation in the US and Wall Street responded with strong increases

United States President, Joe Biden (Reuters/Evelyn Hochstein)

The President of the United States, Joe Biden, celebrated low inflation in the North American countryafter the most recent data showing a By 8.5% in July This is largely due to lower gas and energy prices. “I took a breath”The president confirmed.

on the other side, Stocks opened higher on Wall Street. 4:30 pm (GMT), The S&P 500 is up 1.79%, the Dow Jones is up 1.40% and the Nasdaq is up 2.42%.

The Labor Department reported that US inflation in July fell to 8.5%from the maximum of four decades from the previous month, 9.1%, since Gasoline prices have decreased significantlyWhich could make the Federal Reserve less daring to raise interest rates.

But it’s all above 8% “It’s still too high” for the Fed, said Tan Bun Heng of Mizuho Bank.

“The fight against inflation is not over yet,” Tan said before the inflation data was released.

Raindrops hang from a Wall Street sign in front of the New York Stock Exchange, in New York City, US, October 26, 2020. REUTERS/Mike Sega/File
Raindrops hang from a Wall Street sign in front of the New York Stock Exchange, in New York City, US, October 26, 2020. REUTERS/Mike Sega/File

Although some indications are that inflation will ease in the coming months, Likely to remain well above the 2% annual target. From the Fed until next year and possibly even 2024. Chairman Jerome Powell said the Fed needs to see a series of declining monthly core inflation readings before considering stopping interest rate increases.

The Federal Reserve raised the short-term interest rate in the last four rate-setting meetingsincluding a three-quarter point increase in both June and July, the first increases of this size since 1994. Investors are expecting another 0.75 percentage point rise in September, after data last week showed employment was stronger than expected.

Investors fear that efforts by the Federal Reserve and other central banks in Europe and Asia to cool inflation could derail global economic growth.

People shop at a supermarket in Manhattan, New York, United States, June 10, 2022. REUTERS/Andrew Kelly/File
People shop at a supermarket in Manhattan, New York, United States, June 10, 2022. REUTERS/Andrew Kelly/File

Federal Reserve officials acknowledge that the US economy is in danger of sliding into recession, but some point to the strength of the labor market as evidence that it can withstand further rate hikes.

Families and businesses are the ones who have noticed relief in gas and energy bills. The gasoline index fell 7.7% in July, and the energy index fell 4.6%. Aircraft prices fell for the second month in a row, and used car prices fell slightly.

In the face of lower energy prices, Food prices continued to rise by 1.1% in one month.

(with information from AP)

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