Reference to the CFA’s Advocacy Update from July 15, 2022

The U.S. annual inflation rate defied expectations and rose to a new multi-decade high of 9.1 per cent in the year up to June.

The U.S. Bureau of Labour Statistics said Wednesday that the cost of living rose by 1.3 per cent in the month of June alone, and in three of the past four months.

Rising costs for gasoline, shelter and food were the main drivers of the annual uptick. Energy prices have increased by 41.6 per cent in the past year. Food costs are up by 10.4 per cent. Shelter costs are up by 5.6 per cent.

Economists had been expecting the rate to decline slightly from the 40-year high of 8.6 per cent reached the month before, but instead it ticked even higher, reaching its highest point since 1981.

Analysts say these red-hot numbers will likely compel the U.S. central bank to raise its lending rates even more aggressively in the coming months, upping its rate by 0.75 of a percentage point in August and again in September.

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