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US and EU inflation drops

We've got some good news on inflation. Both key rates for the US and the EU have dropped.

Ludo Lugnani profile image
by Ludo Lugnani
US and EU inflation drops

US Inflation

US inflation dropped to 3.4% in April, right in line with what economists were predicting. This has got investors excited, thinking the Federal Reserve might cut interest rates later this year. Stocks even hit record highs because of this news.

But experts are still cautious, saying inflation isn’t quite under control yet, and it’s still impacting President Biden’s approval ratings. Core consumer prices, which exclude food and energy, rose by 3.6% from last year, marking the lowest rate since April 2021. So, there’s progress, but we’re not out of the woods yet.

Credit: Bloomberg

EU Inflation

Over in Europe, things are looking up too. The European Commission just said Eurozone inflation is dropping faster than expected, down to 2.5% this year. They think it’ll hit the European Central Bank’s 2% target by late 2025. The Eurozone economy is set to grow by 0.8% this year, with the EU overall seeing slightly better growth at 1% in 2024.

Credit: FT

Germany, however, is struggling a bit with minimal growth. Despite these challenges, the European Central Bank is likely to start cutting interest rates soon, which should help boost the economy and household spending.

So, while there are still some hurdles, there’s definitely light at the end of the tunnel.

This is part of our Chart Watch series where I show you the must-know charts and explain in short what they mean.

Ludo Lugnani profile image
by Ludo Lugnani

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