Traders at the New York Stock Exchange (NYSE) in New York City – USA on April 26 Photo: REUTERS
Persistent inflation also threatens the possibility of a “soft landing” of the US economy. In a worse scenario, the FED must even consider raising interest rates in the near future.
Mr. Mike Sanders, head of fixed income at financial consulting company Madison Investments (USA), commented: “If inflation remains at a higher level, the Fed will face a difficult choice: pushing the economy into recession, abandoning the soft landing scenario.”
More optimistic than the US, among the 20 European countries that use the euro, consumer price inflation has slowed steadily since the beginning of the year, down to 2.4% in March. According to CNN, the Central Bank Europe (ECB) is likely to start lowering interest rates in June.
Meanwhile, the USD rose to its highest level in 34 years against the Japanese yen on April 26, after new US inflation data was released. In China, a decline in industrial profits reported in March led to skepticism about economic recovery.
According to data from the National Bureau of Statistics of China (NBS) on April 27, the profits of Chinese industrial manufacturers in the first quarter of 2024 increased by 4.3% over the same period last year but were low. more than the 10.2% increase of the first two months of the year. The figures show that China’s domestic demand remains weak despite solid first-quarter GDP growth.