In the US, inflation has spiraled out of control. The indicator has reached the highest level since the financial crisis of 2008, jumping to 4.2%. Economists expected a smaller rise to 3.6%.
Officials of the US Labor Department explain such a surge by the rising demand amid the improvement of the epidemiological situation. Moreover, the low base effect might also lead to higher inflation. A year ago, inflation was extremely low. It means that on a yearly basis, the indicator’s reading will be distorted by the pandemic consequences. That is why ordinary people in the US have not noted the inflation growth. The recent poll conducted by Gallup unveiled that 57% of US citizens considered their financial situation as perfect or good. A year ago, only 49% of the population gave such answers. What is more, 52% of all the respondents said that their fortune was constantly rising. The indicator has reached the levels logged in 2019 before the pandemic. However, the growing inflation has influenced the debt market rates, which are climbing along with consumer prices.
Yields on the US Treasuries go on moving up. At the moment, it is hovering near the highs hit for the first time since January 2020. The growth of government bond yields leads to an increase in the US debt service costs and creates problems for the placement of new securities.