Chart Beat: Stubborn emerging market inflation dampens interest rate cut hopes
Inflation in the US saw a slower-than-expected rise in April, with the consumer price index (CPI) increasing by 3.4% year-over-year, according to the latest data. The core CPI, which strips out the volatile food and energy sectors, softened for the first time in six months.
However, on the global stage, the inflation fight is far from over. In the March quarter of 2024, the Emerging Economies CPI hit a multi-quarter high of 7.88%.
This composite measure, calculated as a weighted average of 26 emerging markets including India, China, Indonesia, Hong Kong, and Taiwan, factors in each country's nominal GDP in US dollar terms. Economists at Yes Securities noted that while headline inflation has eased in major economies, thanks to a broad decline in goods prices and reduced stress in the global supply chain, it remains elevated in several emerging markets.
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