But the CPI slowdown is likely to be temporary. Gasoline prices, which accounted for most of the pullback in the monthly inflation rate, are rising again and hovered around $4,161 a gallon earlier in the week, after falling below $4 in April, according to the Administration. of Energy Information (EIA).
Russia’s war against Ukraine is the main catalyst for rising gasoline prices. The conflict has also pushed up global commodity prices.
Inflation was already a problem before the invasion of Ukraine on February 24 due to strained global supply chains as economies emerged from the COVID-19 pandemic, after governments around the world pumped in huge amounts of money. relief and central banks cut interest rates.
Inflation is priority
US President Joe Biden on Tuesday acknowledged the impact high inflation is having on American families, saying lowering prices “is my top national priority.”
The Fed last week raised its policy rate by half a percentage point, the biggest increase in 22 years, and said it will start cutting bond holdings next month. The entity began raising rates in March.
In the 12 months through April, the CPI rose 8.3%. While that was the first slowdown in the annual CPI since last August, it marked the seventh straight month of increases above 6%. The CPI soared 8.5% in March, the biggest year-over-year rise since December 1981.
