U.S. Consumer Prices Surged; Inflation Poised to Accelerate Further

Latest data release of U.S. consumer prices accelerated in February, forcing Americans to work harder to pay for rent, food and gasoline, and market analysts are expecting that the inflation is set to grow even further as Ukraine-Russia crisis driving up the costs of crude oil and other commodities worldwide.

According to the report of Labor Department on Thursday, the broad rise in prices led to the largest annual increase in inflation in 40 years. Inflation was already haunting the economy before Russia's invasion of Ukraine on Feb. 24, and could further erode President Joe Biden's popularity.

The upcoming monetary policy of the U.S. Federal Reserve is expected to start raising interest rates next Wednesday. With inflation nearly four times the U.S. central bank's 2% target, economists are expecting as many as seven rate hikes this year.

Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina said, "Consumers' shock at rapidly rising gas prices at the pump will continue to put pressure on the Fed and policymakers to do something, anything, to slow down the speed at which prices everywhere are moving higher."

Latest data released shows that consumer price index increased 0.8% last month after gaining 0.6% in January. A 6.6% rebound in gasoline prices accounted for almost a third of the increase in the CPI. Gasoline prices had declined 0.8% in January. Food prices jumped 1.0%, with the cost of food consumed at home soaring 1.4%.

©Photo: Financial Times