China News Service, July 14 (Xinhua) According to a comprehensive report by the U.S. Department of Labor on the 13th local time, the U.S. consumer price index (CPI) rose by 9.1% year-on-year in June, setting a new record for 40 years.

U.S. President Joe Biden responded that the figure, although "unacceptably high," was "outdated."

　　But analysts generally believe that this data will further squeeze American households and deal a heavy blow to the Biden administration.

The CPI in June will cause the Fed to raise interest rates sharply again, which will cause market unease.

Media analysis pointed out that the risk of the United States falling into a recession has increased, and the "fever" inflation data has caused the American people to worry about the economy, and in the mid-term elections, it will bring major political risks to the Biden administration and congressional Democrats.

Data map: US President Biden.

The Fed may raise interest rates again sharply, the recession risk intensifies

　　Several media pointed out that such a high level of inflation will make it very likely that the Fed will raise interest rates again sharply at its meeting at the end of July.

　　Persistent inflation has rattled Fed Chairman Jerome Powell and other officials, who are taking the fastest series of rate hikes since the late 1980s to curb inflation, the Associated Press said.

Powell stressed that the U.S. central bank wants to see "compelling evidence" that inflation is slowing before it stops raising interest rates.

Evidence of this would need to be "a series of monthly inflation data declines," he said.

　　Some economists worry that the Fed's desire to curb inflation could lead it to raise interest rates too quickly, increasing the risk of a U.S. recession.

On March 6, local time, the vehicle passed a gas station in San Mateo County, California.

　　Standard Chartered predicts a 40%-50% chance of a U.S. recession in the next 12 months.

Many voices believe that in the context of high inflation, it is only a matter of time before the Fed's more aggressive monetary policy pushes the US economy into recession.

And Powell also admitted when he attended a congressional hearing in late June that there is a possibility of recession in the U.S. economy, and it will be very challenging to achieve a soft landing.

　　Analysts believe that if the Fed continues to raise interest rates at such an aggressive pace, the development of the global economy will encounter major challenges in the future.

The British "Guardian" said that after the US inflation rate exceeded expectations to 9.1%, the dollar index rose sharply, and the euro fell below parity against the dollar.

The market believes that a series of aggressive interest rate hikes by central banks including the Federal Reserve, coupled with slowing economic growth, will continue to weigh on the euro, while prompting investors to turn to the safe-haven of the dollar.

Public fears heat up as Biden faces challenges in midterm elections

　　Although Biden said in the statement that the headline inflation data released on the day was "unacceptably high, it is outdated. Today's data does not reflect the full impact of the decline in oil prices for the past 30 days." But it did not affect the American people's economic sentiment. 's concerns.

　　The British "Financial Times" pointed out that recent data show that US personal consumption has weakened.

Weak consumer confidence, rising interest rates and inflation eroding spending power are likely to weigh on consumer demand in the coming months, Standard Chartered strategist Steve Englander said.

　　Inflation has had a brutal impact on the finances of many households, with prices for many necessities surging faster than incomes.

Rising prices have led to a sharp drop in consumer confidence in the economy, dragged down U.S. President Joe Biden's approval ratings and poses a major political risk to congressional Democrats in the midterm elections.

On April 28, local time, customers were dining at a restaurant in Manhattan, New York City, USA.

　　A June poll showed that 40 percent of U.S. adults believe tackling inflation should be the government's top priority this year.

The US”Newsweek” pointed out that recent polls show that most Americans are dissatisfied with Biden’s response to the economy and inflation.

Widespread concerns about the state of the economy also underscore how difficult it is for Biden to convince most Americans that their finances have improved under his leadership compared to their predecessors.

　　According to the June 2022 Consumer Expectations Survey released by the New York Fed, more Americans expressed concern about the deterioration of household finances in the coming year.

Fifty-one percent of respondents expect household finances to get "significantly worse" or "somewhat worse" in the coming year, the first time more than half of those surveyed expect it to get worse.

　　"The U.S. economy remains fragile, and people's pessimism is the worst I've seen," said Mark Zandi, chief economist at Moody's Analytics.