Stronger than expected US inflation and a bump in consumer spending have fuelled worldwide expectations that interest rates will go higher, as predictions about future monetary policy rapidly shift.
The Federal Reserve’s preferred measure of inflation overshot expectations in April, data published on Friday showed, while US consumer spending rose last month and new orders for long-lasting goods unexpectedly increased.
Kristalina Georgieva, the IMF’s head, on Friday warned US interest rates would need to stay higher for longer to tame inflation that had been more persistent than anticipated. She added that a loss of confidence in US Treasury markets would mean turmoil for the global economy.
Read More : Investors foresee increased interest rates amidst growing inflationary pressures