Inflation in the United States fell to 4% in May, the lowest price level in two years, since March 2021, a clear reflection that the cooling efforts are paying off. Although it has been cut by more than half in relation to the historical peak of 9.1% in June 2022, the level is still above the 2% target set by the Federal Reserve (Fed).
But this drop of almost one point in a month, since the price level stood at 4.9% in April, well above forecast, seems more than enough reason for this Wednesday, at the conclusion of their two-week meeting days, the US central bank will impose a pause on its interest rate hike, although there is some possibility that they will continue with their aggressive policy.
This would close a historic stage, with ten consecutive climbs in fifteen months. The rates are now in the range of 5-5.25% in an effort to make borrowing money more expensive and achieve a slowdown in consumption.
The price index, which measures changes in the quantity of goods and services, rose 0.1% in the past month, down from 0.4% in April. In this circumstance, the lower price of gasoline has been a determining factor, with a fall of 3.6%, although food became more expensive by 0.2%, also in clear decline.
However, if more volatile products such as the cost of food and energy are excluded, the picture is somewhat more blurry. Prices rose 0.4% and settled at 5.3% in the annualized record. One of the most influential factors was the increase in housing by 0.6%. Second-hand cars rose 4.4%, the same as in April, and transport prices rose 0.8%.
Experts say all this shows that there has been a shrinkage, but that consumers are still feeling the sting of inflation in their pockets.
