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New CPI Report Will Outline Depth of US Inflation Problems

The Consumer Price Index (CPI) report for June is due out on Wednesday and it is expected to exceed the 8.6% recorded in May. Hopes were that inflation had peaked, but in addition to the stronger-than-expected jobs report last week, the Federal Reserve may be inclined to double down on its aggressive rate hike strategy, potentially implementing a another three-quarters percent increase when policymakers meet at the end of the month.

Inflation and fears of impending recessions in the world’s major economies are prompting investors to seek safe investments to weather the storm. The ripple effect is that investing in greenbacks is even more attractive, pushing the US dollar higher against other global currencies. The pound recently hit a two-year low against the US dollar and the euro almost fell to parity with the greenback for the first time in twenty years.

The common European currency is expected to fall behind the US dollar in August. That’s good news for those planning to cross the pond this summer, if they can find a reasonably priced flight. Airline ticket prices jumped 38% from a year ago due to strong demand and high crude prices.

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