According to economist Edin Mujagic, the U.S. is “worse” about hyperinflation. Inflation in the US fell to 4.9 percent last month, the lowest figure in two years. ‘It seems so strong that you can safely conclude that the worst is over.’
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‘But’, Mujakic qualifies, ‘bad is not synonymous with bad, it’s even worse’. He points out that this figure is also ‘very poor’. ‘The target of two per cent inflation was light years away at first, but is now less distant. We are on track for that two per cent.’
Yet Mujakic looks at the details of the ‘hood, which makes him less happy. Looking at core inflation, it remains at 5.5 percent and has not fallen since the last months of last year. It remains stubbornly high,’ says the economist.
drag
Mujakic also sees a key figure known as ‘sticky inflation’. ‘These are slowly changing prices. It is still at 6.5 per cent and has not declined in recent quarters.’ Mujajic isn’t surprised that despite the Federal Reserve’s strong interest rate hikes, inflation hasn’t fallen fast enough. ‘On the one hand, you see it takes a while for an interest rate change to have an impact on the economy.’
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But the economist points to a talking point he’s already mentioned: slow inflation. On the other hand, that shock from last year’s high current oil and gas prices is gradually starting to seep into every pore of the economy. Then you get two opposite effects,’ explains Mujakic. “So it’s kind of a drag.”
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