It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
Inflation rose to 3.5% in March, driven by higher housing, gasoline, and other costs. However, some areas, like groceries, have seen improvement. While overall inflation is still elevated, wage growth has outpaced inflation, boosting household buying power. Experts believe inflation may be taking longer to subside than expected, but progress is being made and a return to normal levels is anticipated.
Inflation in the euro zone has slightly decreased to 2.4%. This has led to expectations that the European Central Bank will begin reducing interest rates in June. While some sectors remain inflationary, overall price pressures have eased. A low unemployment rate and the recent messaging of ECB officials support the likelihood of rate cuts in the near future.
Despite efforts, inflation may take longer to tame, potentially leading to a "deferred landing." The Federal Reserve will remain cautious, keeping interest rates high, which could benefit those earning income from portfolios. Experts advise against changing long-term investment strategies, maintaining diversification and asset allocation, as timing inflation projections accurately doesn't necessarily guarantee better returns.
Despite ongoing inflation, certain categories are experiencing price drops. Egg prices have plummeted by 17%, while health insurance, laundry equipment, and car rentals have also seen significant declines. While the Federal Reserve aims for 2% inflation, core inflation remains elevated at 3.8%, indicating that it will take time to bring prices under control. Despite the challenges, real wages have risen since 2019, and global inflation is expected to moderate in the future.
Inflation in the European Union declined slightly in February to 2.6%, but remains higher than anticipated, with core inflation also above expectations. The European Central Bank faces challenges in balancing inflation control with economic growth concerns, as core inflation persists above 3%. Wage negotiations in the spring and price increases driven by the Russian invasion of Ukraine will influence the ECB's decision on adjusting interest rates.
Headline inflation is forecast to show a 0.4% monthly increase and 3.1% year-over-year gain, with core inflation predicted at 0.3% monthly and 3.7% annually. This resilience may prevent Fed rate cuts at the next meeting. Rising gasoline prices have contributed to inflation, reinforcing the Fed's cautious approach to interest rate reductions.
