Inflation surges 8.5% in July, stoking fears of stiff rate hike | Big Indy News
Connect with us

News

Inflation surges 8.5% in July, stoking fears of stiff rate hike

Published

on

Inflation surged 8.5% in July, hovering at a four-decade high and adding pressure on the Federal Reserve to bring down the price of necessities such as food, gas and rent.

The July reading of the Labor Department’s Consumer Price Index, a closely watched measure of the costs of goods and services, marked a slight decrease from the previous month, when inflation hit a fresh peak of 9.1%.

That number, the highest since 1981, was driven in large part by a record spike in gas prices that has since receded.

Ahead of the Consumer Price Index release, economists projected inflation would rise 8.7% year-over-year in July and 0.2% compared to the previous month, according to Dow Jones data.

Economists had expected core inflation to hit 6.1% for the month. The Fed’s target for inflation is 2%.

The latest data supports the market’s view that the Federal Reserve will take aggressive action in the months ahead to tame inflation.

The decline in gas prices was the key factor in the slight downtick from June to July. The average price has fallen steadily in recent weeks after hitting an all-time high of $5.016 in mid-June.

As of Wednesday, the national average was $4.010, according to AAA.

While gas prices are on the decline, the costs of other key inflation drivers such as rent and services remain historically steep.

Even with the minor decline in headline inflation, American households likely experienced little relief in July, according to Greg McBride, chief financial analyst at Bankrate.

“To relieve the pressure on household budgets and boost the otherwise sour mood of consumers, we need to see a broad-based, significant, and sustained easing of pricing pressures for the remainder of 2022 and well into 2023,” McBride said.

The latest CPI data emerged just days after a July jobs report that blew away economists’ expectations.  US employers added 528,000 jobs in July – more than twice what economists expected – while wages jumped 5.2% year-over-year.

Gas prices have fallen since hitting record highs in June.
AFP via Getty Images

The red-hot jobs market raised concerns among investors that the Fed would implement more sharp interest rate hikes to ensure the economy is sufficiently cooled to bring down prices.

The rate-setting Federal Open Market Committee has hiked its benchmark rate by three-quarters of a percentage point, its sharpest clip since 1994, at each of its last two meetings.

Grocery shopper
Food prices have surged over the last year.
AFP via Getty Images

Two top Fed officials – San Francisco Fed President Mary Daly and Federal Reserve Governor Michelle Bowman – said this week to expect more larger-than-normal rate hikes until inflation shows signs of steady decline.

“My view is that similarly sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” Bowman said in prepared remarks for the Kansas Bankers Association, according to CNBC.

Ahead of the July CPI release, the market was pricing in a 67.5% probability for a three-quarter percentage point hike at the Fed’s next meeting in September, according to CME Group data.

Fed Chair Jerome Powell
Fed Chair Jerome Powell is under pressure to bring down prices.
AP

Fed Chair Jerome Powell has indicated the central bank will closely track data indicators between its July and September meetings before making any decision.

“We anticipate that ongoing increases in the target range for the federal fund rates will be appropriate,” Powell said after the most recent hike in July. “The pace of those increases will continue to depend on the incoming data and evolving outlook for the economy.”

“While another unusually large increase could be appropriate at our next meeting, that is a decision that will depend on the data that we get between now and then,” he added.

President Biden
President Biden and his team have touted the recent decline in gas prices.
AP

Meanwhile, President Biden and his team took a victory lab ahead of the data, pointing to falling gas prices as a sign that the administration’s policies were having an effect.

Critics have alleged that Biden’s hardline stance toward domestic energy producers has exacerbated the problem.

Read the full article here

News

Drive-by outside Nashville church injures 2 at funeral for shooting victim

Published

on

NASHVILLE, Tenn. — A drive-by shooting in Nashville on Saturday injured two people as they and others were walking out of church from the funeral of a woman who was fatally shot earlier this month, according to police.

Metro Nashville Police Department spokesperson Don Aaron said the afternoon shooting occurred outside New Season Church, where a funeral service had just ended for 19-year-old Terriana Johnson. The hearse was parked out front with the rear door open and people were filing out of church as the shots began, Aaron said.

Police say they are on the lookout for a black late-model Honda Civic with a temporary tag, from which one shooter or more fired as the car passed by, hitting an 18-year-old woman in the leg and a 25-year-old man in the pelvis. Neither were considered life-threatening injuries, Aaron said.

Some attendees of the funeral services for Johnson — who was not a member of the church that was hosting — were armed and fired back at the car, Aaron said.

The shooting occurred before Johnson’s body was brought out of the church, according to police, and her burial took place later in the afternoon.

Authorities remain on the lookout for a 17-year-old charged with criminal homicide in Johnson’s fatal shooting on Nov. 14 at Watkins Park. Police allege that the teen opened fire on a car in which Johnson was riding after Johnson and the suspect’s sister were involved in a fight moments earlier.

Aaron said the shooting “appears to be some type of beef between two groups of people,” but not necessarily between members of the two families.

“This was just a brazen shooting,” Aaron told reporters. “These persons have no regard for human life at all.”

Read the full article here

Continue Reading

News

EU officials slam Biden administration for ‘profiting’ off Ukraine war

Published

on

A collection of high-ranking European officials are fed up with the Biden administration for what they view as war profiteering during the conflict in Ukraine.

The comments come amid rising gas prices and mounting tension toward US legislation that offers tax credits to those who “Buy American.”

Meanwhile, Putin’s invasion of Ukraine is pushing European economies toward recession while the US is benefitting, some officials claim.

“The fact is, if you look at it soberly, the country that is most profiting from this war is the US because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior EU official told POLITICO.

The European Union has turned to the US for gas to reduce reliance on Russian fuel — but the price the EU is paying is reportedly four times higher than what Americans are shelling out for the same product.

Putin’s invasion of Ukraine has pushed the EU to look toward the US for gas.
AP

“The United States sells us its gas with a multiplier effect of four when it crosses the Atlantic,” Thierry Breton, European Commissioner for the Internal Market, said on French TV on Wednesday. “Of course the Americans are our allies … but when something goes wrong it is necessary also between allies to say it.”

The Biden administration has adamantly denied price-hiking accusations and instead blamed the high costs on the Ukrainian conflict.

“The rise in gas prices in Europe is caused by Putin’s invasion of Ukraine and Putin’s energy war against Europe, period,” a spokesperson for Biden’s National Security Council told Politico.

Thierry Breton is the European Commissioner in Charge of Internal Market.
Thierry Breton ripped the US for up-charging gas by a multiple of four.
REUTERS

The dispute is compounded by Biden’s Inflation Reduction Act, a massive tax, health care and climate package that offers tax credits to those who buy American-made electric vehicles, sparking concern among European car manufacturers.

“Nobody wants to get into a tit-for-tat or subsidy race. But what the US has done really isn’t consistent with the principles of free trade and fair competition,” Irish Trade Minister Leo Varadkar said during an emergency EU Commission meeting on Friday, according to Fortune.

Read the full article here

Continue Reading

News

Colorado home where Chris Watts killed his family is sold

Published

on

The Colorado home where Chris Watts savagely murdered his pregnant wife and two children in 2018 has been sold, according to a report.

The five-bedroom, four-bath house in Frederick was sold for an unspecified price, The Sun reported.

It had been on the market since May when the listing said potential buyers had to submit a funding commitment of at least $600,000 from a bank.

A real estate agent posted a congratulatory note on social media to the new owners saying, “It took everything we had to get here!!! So happy for you guys and can’t wait to see the memories you make in your new home!!!” according to The Sun.

The agent then added “since it’s been asked. Yes, this was the Watts house. It is now the Miller home and they cannot wait to put love, family and laughter back into this house.”

Chris Watts was convicted of murdering Bella, Celeste and Shanann Watts in 2018.
The Colorado Bureau of Investigation via AP
Christopher Watts is escorted into the courtroom before his bond hearing at the Weld County Courthouse in Greeley, Colo.
Christopher Watts is escorted into the courtroom before his bond hearing at the Weld County Courthouse in Greeley, Colorado, on Aug. 16, 2018.
Joshua Polson/The Greeley Tribune via AP, Pool, file
Chris Watts
Chris Watts murdered his pregnant wife and two children.
Weld County Sheriffs Office/MEGA

Watts was convicted of the 2018 killings of his wife, Shanann, 34, and daughters Bella, 4, and Celeste, 3,

The murders were the subject of the Netflix documentary “American Murder: The Family Next Door.”

Read the full article here

Continue Reading

Trending