On September 11, reports indicated that the United States sustained a high annual inflation rate last month, with gasoline prices persisting at lofty levels. The market had previously anticipated a cooling of inflation, paving the way for the Federal Reserve to potentially lower interest rates. Yet, the conflict in Iran and the consequent spike in energy prices have dashed these hopes. Data from the American Automobile Association (AAA) reveals that the average price of regular gasoline surged to $4.07 per gallon in August, marking a nearly 30% increase year-on-year. As of this month, the average price had climbed to $4.30 by Friday, propelled by the intensification of the conflict in Iran.
Inflation data holds paramount importance for the Federal Reserve's decision-making at its policy meeting next week, with notable divisions within the institution regarding whether to hike interest rates. At the July meeting, three officials already cast their votes in favor of a rate increase, while others signaled their potential support for a hike should inflation fail to show improvement.
Moreover, the scarcity of memory and storage chips, a byproduct of artificial intelligence development, has further escalated prices of consumer electronics. For example, Apple's newly launched foldable smartphone, released this week, carries a hefty starting price of $1,999 to offset the rising costs.