The Existing Inflation Woes Concerns THE US STOCKS & GLOBAL SELL-OFFS
Concerns that the US would need to intervene to control inflation shook the financial system last week, and UK stocks hit the global stock market.
The FTSE 100 index of the world’s largest companies fell 2.3 percent, and European markets followed suit.
On Wednesday, a rise in US inflation sparked concerns that the world’s largest economy will raise interest rates faster than anticipated.
As per an official survey, US inflation has been steadily growing for the past 13 years, amid concerns that the central bank will be forced to raise interest rates, suffocating growth.
The consumer price index increased by 4.2 percent in the year to April, following a 2.6 percent increase in March.
As a result, the Dow Jones Industrial Average fell 2%, the S&P 500 fell 2.14 percent, and the technology-heavy Nasdaq fell 2.67 percent. The S&P 500 is a publicly-traded stock market index that includes 500 of the country’s largest publicly traded firms. The S&P 500 is one of the most widely followed stock market indices.
If the Federal Reserve increases the company’s liquidity to fight price inflation, it would almost certainly have a detrimental effect, delaying the recovery of many other areas of the global economy.
President Joe Biden of the United States unveiled proposals for a $1.9 trillion (£1.4 trillion) economic stimulus bill in March, which will see the government hand out $1,400 checks to a number of Americans. He has announced plans for more government spending on employment, education, and social services. This has resulted in funds being accumulated, which are now being spent as the economy reopens, driving up prices.
Although a slowdown in US growth would have ramifications for global businesses, it is possible that inflation will occur in many countries.
The standard of living in the United Kingdom is expected to increase this year as a result of rising crude oil prices, progress toward the local gas and electricity cap, and businesses increasing prices as they exit the lockdown.