US inflation is expected to accelerate further as the impact of the war in Ukraine intensifies.
These events also come at a difficult time for the Biden administration, which has already faced criticism over rising rent, electricity, and food costs.
Reuters - Russia's invasion of Ukraine dashed any hope U.S. consumers had of relief from soaring costs, with gasoline prices rising at their fastest pace in nearly 17 years last week and other goods, such as food, also poised to surge.
Even before the invasion, it was already expected that the next monthly US inflation report, to be released on Thursday, would show prices rising at the fastest pace in 40 years.
The data, which refers to February, will likely only show... a preliminary impact of rising oil pricesOil, which hit over $130 a barrel on Monday, is expected to fuel overall inflation in the coming months.
"There were expectations that February would be the peak of annual inflation, but the shock in Ukraine is already pushing gasoline prices up for March," said Tim, an economist at SGH Macro Advisors.
These events also come at a difficult time for the Biden administration, which has already faced criticism for rising rent, electricity, and food costs as the economy grapples with the impact of the Covid-19 pandemic.
Federal Reserve officials will also be closely monitoring the inflation reading, which will be released just under a week before the meeting where the Fed is expected to raise interest rates by 0,25 percentage points, initiating a monetary tightening cycle aimed at reducing inflation without hindering economic expansion.
Economists polled by Reuters predict that the U.S. consumer price index rose 7,9% year-on-year in February, compared to 7,5% in January. The monthly rate is expected to have accelerated to 0,8% after rising 0,6% the previous month.
The average price of unleaded regular gasoline in the U.S. was $4,065 a gallon (3,8 liters) on Monday, according to the American Automobile Association (AAA), just about 5 cents below its record peak. The increase last week, of about 45 cents per gallon, was the largest since 2005, the AAA said.
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