The rate of inflation in the United States reached a 40-year high, but it has since sharply decreased as a result of things like rate hikes by the Federal Reserve.
As of March 2024, the annual inflation rate is 3.5%, which is well above the 2% goal rate.
The CPI, a comprehensive measure encapsulating the cost of diverse goods and services across the economy, escalated by 0.4% in March.
This escalation lifted the 12-month inflation rate to 3.5%, a 0.3 percentage point increase from February. Economists had predicted a 0.3% gain and a 3.4% year-over-year level.
Read: Inflation Accelerates In March: A Comprehensive Analysis
According to a report by WalletHub, two Florida cities, Miami and Tampa, rank in the top 20 US cities with the biggest inflation issues.
“Inflation rates are still a shade above past trends (3% versus 2%). Residual supply chain troubles contribute to this, although the largest factor is the strong economy with pressure on wages and opportunities for businesses to raise prices to increase profits,” said Gerald Friedman – Professor, University of Massachusetts at Amherst.
“These days, inflationary expectations are in line with past experience, suggesting that observers expect a stable inflationary environment going forward,” said Friedman.
In overall ranking nationwide, Miami saw a 1.50% Consumer Price Index Change in March versus the previous two months and a 4.80% increase year-over-year in the same month.
Tampa came in a bit lighter, with a .090% increase in March compared to the previous two months and a 3.70% increase year over year in the same month.
Read: Poll: Biden Losing Traction Among Voters When It Comes To “Positive Personal Qualities”
“There are other tools to control inflation, but they only work in the short term. Price controls, for example, are hard to enforce and can lead to market distortions because prices are not based on actual supply and demand. Tax increases or wage controls are deeply unpopular. So, raising interest rates is the most effective solution to control inflation. This is not to say that it is the perfect solution; in particular, higher interest rates are really bad for low-income families that already have high credit card debt and no savings. But in the aggregate, it is a strategy that tends to work,” commented Iasmin Goes, Ph.D. – Assistant Professor, Colorado State University.
The unexpected surge in March had a tangible impact on the markets Wednesday. Stock markets stumbled following the report, while Treasury yields underwent a sharp climb.
Shortly after the markets started, the Dow fell 525 points, or 1.35%, to 38,359, far short of the 40,000 level that it nearly reached a few weeks ago. The Nasdaq plummeted over 1.3%, while the S&P 500 slid more than 1.2%.
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