Source: People's Daily International WeChat public account
The U.S. Consumer Price Index (CPI) rose 9.1 percent year-on-year in June, a nearly 40-year high. Inflation in the United States continues to soar, and the price level remains high, making the American people miserable and feeling "overwhelmed", and many people have to change their lifestyles. 88% of respondents believe that the United States is on the wrong path. In the face of "high fever" inflation, the Fed's aggressive interest rate hike again has become the consensus of the market, which will not only further exacerbate the risk of a "hard landing" of the US economy, but also endanger the stability of the global economy.
The New York Times —
"They are saving less and the cost of living is getting higher and higher"
U.S. Treasury Secretary Yellen recently made another statement to cheer up the U.S. economy, saying she did not see any signs that the U.S. economy was in a widespread recession and expressed confidence that the Fed would succeed in fighting inflation. However, the American people really feel the huge pressure and change that high inflation has brought to their lives.
Kate Johnston, 31, who lives in the Dallas area, was briefly relieved of her financial worries by receiving expanded unemployment insurance and two one-time checks from the government during the pandemic. However, this is not comparable to the ensuing inflation. "Savings are almost all spent now because things have become too expensive," she said. Gasoline became more expensive, and she could only add 1/4 of the tank of gasoline at a time. As rents climb sharply, she is considering sharing a room with someone. "It really makes me feel like whatever I want to do is going to be put on hold."
According to the Los Angeles Times, inflation in the United States reached 9.1% in June, a nearly 40-year high. Source: Los Angeles Times website
According to The New York Times, millions of Americans feel similarly, "they are saving less and the cost of living is getting higher." Now, the U.S. economy appears to be on the verge of slowing, possibly sharply, which could limit wage growth and lead to job losses while prices are still rising. "The problem now is stubbornly high inflation," the report said. ”
Inflation is at an all-time high, and Americans are increasingly anxious about the possibility of a recession. Allianz Life North America's second-quarter market perception study found that a majority of Americans said their revenues could not keep up with rising spending. 82% of Americans said they fear rising inflation would continue to negatively impact their purchasing power over the next 6 months. 66% of Americans fear the Great Recession is coming.
Persistent record inflation has exacerbated collective fears. Kelly Lavigne, vice president of Allianz Life North America, said: "Rising prices for necessities such as food and gasoline are hitting Americans' bank accounts. Some may have used their savings to make up for the initial price increase in the short term. But as this drags on, concerns about how rising inflation will affect long-term purchasing power and savings are growing. ”
The Associated Press —
Many people seek food relief for the first time, and many walk to get food
"The situation is already grim." Elizabeth Annat, an economics professor at Barnard College in the United States, said she studied the impact of the epidemic on low-income families, and that the situation in the United States is "much worse than it was a few months ago." The Associated Press has been even more blunt, and as inflation in the United States has reached a high level, long queues have begun to form in front of food banks. American wage earners have turned to relief food to help them make ends meet. Due to soaring gasoline prices and food prices, many people seek food relief for the first time, and many walk to collect food.
Tomasina John, one of whom lined up outside the St. Mary's Food Bank in Phoenix, said her family had never received relief food before. "But without some help, it's really impossible to get through it now." They had to travel with their neighbors and split the cost of gasoline, "the price of oil is too high."
According to NBC, as inflation has risen, food banks have lined up again. Source: NBC website
Npriot reports that inflation is hitting rural america hard and may even force people to flock to cities to ease economic pressures. Iowa State University professor Dave Peters has been studying the impact of inflation on residents of rural communities. He found that spending by Americans in rural areas has increased by 9.2 percent this year alone, but their incomes have increased by only 2.6 percent.
Peters said the main impact is higher fuel prices, especially for farmers, who are worried about higher gasoline prices. The area in rural areas most affected by inflation is travel. The lack of public transportation has forced residents of rural Areas of the United States to drive to work, school, medical care, and daily necessities. Rural households now pay $2,500 more a year for gasoline than they did two years ago.
Al Jazeera -
U.S. anti-inflation policies will destroy the economies of developing countries
High inflation in the United States has profound implications for both the United States and the world. Bloomberg News noted that many of the changes brought about by high inflation affect Americans, and rising home prices are forcing many people in their 30s, 40s and 50s to move back to their parents' homes. Young people with a tight budget are budget-conscious, but more money is spent paying rent. Inflation of 9.1% means more stress than ever.
A poll released by Monmouth University in early July showed that the number of fiscally troubled Americans has grown at a double-digit rate over the past year, with 42 percent of respondents saying they are in financial trouble, and most Americans saying their economic pain is caused by the failure of federal government policies that have not benefited middle-class and poor families, and congresses are still divided. In addition, 88% of respondents believe that the United States is on the wrong path.
At the same time, the aggressive U.S. policy toward inflation is like a "poison" to the global economy. The Wall Street Journal reported that Fed officials said they would choose the former if forced to choose between lowering inflation and preventing a recession. Fed officials are expected to raise rates by 0.75 percentage points this week, bringing the federal funds rate to a range of 2.25 percent to 2.5 percent.
Qatar's Al Jazeera noted that U.S. anti-inflation policies will destroy the economies of developing countries. The article said that interest rate hikes will not be limited to the United States, because high interest rates will raise the cost of borrowing in dollars in global markets, and it will also increase the demand for dollar assets compared to other currency assets. As a result, interest rate hikes will lead to depreciation of other currencies, and the cost of repaying debt will be very high for countries whose debt is denominated in dollars.
Gian Melleisi-Ferretti, a senior fellow at the Brookings Institution and former deputy director of the Research Department of the International Monetary Fund, said in a foreign affairs article that us interest rate hikes could have a devastating impact on emerging markets and developing countries, which rely mainly on the us dollar for international lending. The consequences of these effects will be dire for low- and middle-income countries. In fact, these countries have heavier debt, higher borrowing costs, and are more likely than other countries to need to borrow in dollars, which is particularly detrimental to emerging markets and developing markets that are still suffering from the pandemic. Most likely, these countries will be subjected to greater debt pressures due to currency fluctuations, which will hinder economic growth and make it difficult to reduce poverty.
Source: People's Daily Central Kitchen - Zero Time Difference Studio Author: Li Zhiwei