The Consumer Price Index or CPI in the United States is reported in the higher position. In the yearly basic, the US inflation reached 5% in May where it was in 4.2% before. 

That newest data is higher than the expectation of 4.7% and it also becomes the highest level since August 2008. Meanwhile, the monthly CPI is decreasing from 0.8% to 0.6% in May period. 

However, that result is still better than the declining expectation of 0.4%. The monthly CPU Core which is not counting the fuel and foods' prices is also slipped. It is from 0.9% to 0.7% so far. 

The Significant Increase Happened Last Year

The America’s significant yearly inflation increase happened last year. The inflation was slipped because of the lockdown decision which must be applied to stop the spread of the COVID-19 virus. 

The normalization of economy is done gradually this year. The covid vaccine is also implemented to the United States people. That makes the inflation has a chance to increase again. 

The recovered oil price also has a contribution due to that increase. The data showed that the rising oil price this time is 56.2 percent if it is compared to the May 2020 period. There is a sign. 

The American inflation jump reflect the base effect situation. Before, the Fed’s representatives have been explaining that the thing like this may be happened, but it is temporary 

The Overheat Economy Risk

Furthermore, the overheat economy risk may be occurred. So many people worried that it will come at the same time with this condition. However, the US central Bank convinced the public. 

The Central Bank stated that they are able to bundle everything even with the accommodative monetary policies this time. The interesting thing happened where the US CPI data last night was not moving the USD significantly.

When this news written on Thursday night, the US dollar index was only slipped by 0.08% and consolidated in the level of 90.0 since the beginning of this week. What is the cause?

Subadra Rajappa as an analyst from the Societe Generale stated that it is caused by the data which is not far from the expectation. Furthermore, the investors have been believing that the inflation increase is just temporary. 

The US Economy Growth may Slow Down

Several situations made the market is quite calm. Meanwhile, snorter analyst said that some of the investors predicted that the economic growth in America will be slowing down. 

The impact is that the temporary inflation acceleration will be blocked by the slowing down economy. Elsewhere, the European Central bank or ECB decoded for not making some changes. 

Those are for its monetary policy or even for the emergency fund for the pandemic. The ECB interest rate is always maintained in the zero level. Christine Lagarde as their President gave a statement. 

She talked about the inflation happened in the EuroZone. Before, the newest EuroZone data showed the quite high increase in almost all the members although it was still under the target of 2%.

The Economic Outlook is Brighter

However, the economic outlook in the EuroZone is projected to have a brighter future. The GDP growth level for 2021 is revised higher and expected that it will reach the 4.6% level. 

In 2022, the level may be increased by 4.7 percent. Meanwhile, the yearly inflation in 2021 is expected and reaching the 1.9%. However, in 2022 that may decline again and be in the 1.5% level. 

The ECB statement yesterday showed that the Central Bank must avoid the taper talk and prefer to run the thing has been implemented before. However, a stimulus tapering is still possible to appear this year.