The new CPI report will outline the extent of America’s inflation problems
The Consumer Price Index (CPI) report for June is due on Wednesday and expectations are that it will exceed the 8.6 percent registered in May. Hopes were that inflation had peaked, but on top of last week’s stronger-than-expected jobs report, the Federal Reserve may be inclined to double down on its strategy of aggressively raising interest rates, potentially implementing another three-quarters of a percent when policymakers meet at the end of the month.
Inflation and fears of a looming recession in major economies around the world have investors looking for safe havens to weather the storm. The final effect is that investing in the dollar is even more attractive, causing the US dollar to rise against other world currencies. The pound recently fell to a two-year low against the US dollar, and the euro almost fell to parity with the dollar for the first time in twenty years.
Expectations are that the common European currency will fall behind the US dollar in August. That’s good news for those planning to travel across the pond this summer, if they can find a reasonably priced flight. The price of airline tickets has jumped by a whopping 38 percent compared to last year due to high demand and high crude oil prices.