The United States Consumer Price Index (CPI), which measures North American inflation, rose 0,1% in August after remaining unchanged in July, as announced today by the Department of Labor (Bureau of Labor) from the USA.
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In the annual comparison (the accumulated result for the months up to August), the CPI was 8,3%. The indices came in above what economists consulted by “The Wall Street Journal” predicted, who estimated a 0,1% drop in prices.
As a result, bets have increased that the Federal Reserve (Fed, the North American central bank) will take an even tougher stance on monetary policy, raising interest rates in the economy.
With the surprise, there was a sell-off in the stock market – as it is called when investors sell shares to avoid losing money in times of uncertainty.
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The Dow Jones index closed down 3,94%, at 31.104,97 points, while the S&P 500 fell 4,32%, at 3.932,69 points, and the Nasdaq fell 5,16%, at 11.633,57 points.
Why did the rise in the inflation rate affect the stock market so much?
“Inflation is much more worrying” than expected “and this increases the risk of seeing the Fed push the economy into a recession”, highlighted Edward Moya, an analyst at Oanda, interviewed by AFP. The analyst talks about the sharp increases in interest rates, decided by the organization to combat rising prices.
Central banks tend to raise interest rates to contain inflation, which makes loans more expensive, both for individuals and companies, causing a slowdown in the economy. economy.
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With AFP
