Market history · Inflation ·
US inflation reaches 9.1%, a 40-year high
On 13 July 2022 the US Bureau of Labor Statistics reported that consumer prices had risen 9.1% over the 12 months to June, the largest annual increase in 40 years. CNBC noted the figure was above expectations, driven by energy and food prices.
The report cemented expectations of further large rate rises by the Federal Reserve, which had raised rates by 75 basis points in June, and it came as the dollar was strengthening against most currencies. Inflation fell in the following months, but the speed of the rise had changed the thinking of central banks and investors.
The takeaway
A fall in inflation from a peak still leaves prices higher. The effect on real returns lasts longer than the headline.
Sources
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