The economy is witnessing runaway prices, as consumers try to finds ways to keep up. In June, the Consumer Price Index (CPI) accelerated 9.1% year-over-year, driven by surging costs for fuel, food, and other necessities. It also marked the largest increase since 1981.
“Inflation is above 9%, but the breadth of the price pressures concerns the Federal Reserve. With supply conditions showing little improvement, the onus is on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising,” said James Knightley, ING’s Chief International Economist.
