WEB changes in PCE indicate whether inflation risk is increasing or if prices are more likely to
US inflation rate rose in January
The Fed's preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index, rose 0.6% in January, the largest monthly increase since August. The increase was driven by a rise in energy prices, which rose 2.0%. Food prices also rose, by 0.4%. Core PCE inflation, which excludes food and energy prices, rose 0.4%, the largest monthly increase since October.
The increase in inflation is likely to add pressure on the Federal Reserve to raise interest rates more aggressively. The Fed has already raised interest rates three times since March, and has indicated that it will continue to raise rates until inflation returns to its target of 2%.
WEB Inflation rate in Germany rose for the first time in August
The inflation rate in Germany rose for the first time in August, according to calculations by Deutsche Bank. The consumer price index (CPI) rose by 0.3% in August, after falling by 0.1% in July. The increase was driven by a rise in energy prices, which rose by 1.0%. Food prices also rose, by 0.2%.
The increase in inflation is likely to put pressure on the European Central Bank (ECB) to raise interest rates. The ECB has kept interest rates at record lows since 2014, but has indicated that it may start to raise rates later this year.
WEB Conclusion
The increase in inflation in the US and Germany is a reminder that the global economy is still facing inflationary pressures. The Fed and ECB are likely to continue to raise interest rates in an effort to bring inflation back to their targets. This could have a negative impact on economic growth, but it is necessary to prevent inflation from spiraling out of control.
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