“Economic storm” rekindled

Some fund managers and strategists still maintain the view that inflation in the US will soon peak and the economy will not fall into a recession despite the increased risk. While inflation is worrisome, they say, unemployment is low and wages are still growing, though not as quickly as prices. Supply chain disruptions will begin to ease, significantly reducing the pressure on commodity prices.

Being optimistic, Kit Juckes strategist at Societe Generale Finance (France) told CNN that US inflation will peak in the next 1-2 months but core inflation will drop to around 3% after that. there.

More cautiously, Mr. Jamie Dimon, Chief Executive Officer (CEO) of JPMorgan Chase, said that he and the largest US bank are preparing to deal with the impending economic storm.

At a financial conference in New York City on June 1, Mr. Dimon said that while the temporary situation “looks fine”, no one knows what will come next, “small storm or superstorm Sandy”.

According to the station CNBCone of the two main factors that worries the CEO of JPMorgan is that the US Federal Reserve (FED) has signaled it will reverse its emergency bond-buying program and reduce the size of its balance sheet. accidentally pushed the US economy into a recession when against the price increase.

The other source of concern is the Russia-Ukraine conflict and its impact on commodity prices, including food and fuel. According to Mr. Dimon, the price of oil could increase to 150 or 175 USD/barrel.

People shop at a traditional market in Depok area, on the outskirts of the capital Jakarta – Indonesia on June 2 Photo: REUTERS

Not only the US is facing an “economic storm”, the Swiss government on June 2 said that prices in this country in May rose to the highest level in nearly 14 years.

The consumer price index (CPI) rose 2.9% from a year earlier as transportation costs make food much more expensive in a country seen as having historically low inflation.

This was the largest price increase in Switzerland since September 2008 and the fourth consecutive month that prices rose above the target of the Swiss National Bank, prompting the agency to consider raising interest rates.

In Indonesia, the consumer price index increased by 3.55% in May, higher than 3.47% in April. Mr. Margo Yuwono, head of the Indonesian Statistics Authority, said the ban on palm oil exports in Three weeks in May helped bring oil prices down, but warned that global food inflation would continue to affect local prices.

According to Statistics Malaysia’s April CPI report, food prices increased by more than 4.1% year-on-year and 89.1% of items in the food and beverage group rose in price. To prevent commodity prices from skyrocketing, the Malaysian government has spent billions of dollars in subsidies and introduced a system of price controls.

Australia is also not immune to the risk of inflation, as experts warn the energy crisis will soon affect millions of people.

Mr. Joel Gibson, director of the Australian Consumer Advice Center One Big Switch, said the rising wholesale cost of electricity had negatively impacted the retail electricity market. Electricity prices have increased by more than 140% in the past 12 months (to the end of March 2022) and gas prices have increased even more alarmingly.