The US economy faces new risks.

Notably, rising energy prices and input costs are causing inflation to show signs of rising again right from the beginning of the second quarter. Experts assess that the turning point for the US economy lies in March and early April, when complex geopolitical conflicts are causing oil prices and other costs to rise sharply.

The recently released Consumer Price Index (CPI) shows that overall inflation rose to 3.3% in March, significantly higher than the 2.4% recorded in February. Inflation expectations for next year have also increased from 3% to 3.4%. The Federal Reserve is now in a difficult position if it wants to lower interest rates to support growth.

Ben Truck, Portfolio Manager at Truck Capital Management in the US, said: "I think the level of uncertainty has increased significantly. Entering this year, most people expected the Federal Reserve to cut interest rates. But now, the market is starting to factor in the possibility that the Fed might even raise rates later in the year, due to soaring energy costs."

Furthermore, consumer spending, which has been the biggest driver of US economic growth, is also weakening. Household consumption is projected to slow down quite rapidly in the second quarter if energy prices remain high. Notably, even high-income households, which have accounted for nearly half of purchasing power in recent times, may adjust their spending as the momentum from stock market asset gains weakens.

Sam Stovall, Head of Strategic Consulting at CFRA, USA, commented: "I believe uncertainty is causing consumers to cut back on spending. Instead, they are focusing their attention on current events. Furthermore, when stock prices fall, consumers feel their assets are dwindling. This leads them to spend even less than expected."

However, according to many experts, the US economy still has many bright spots in the medium and long term. Confidence in inflation returning to control remains strong, as evidenced by expectations of inflation at only 3.1% for the next three years and 3.0% for the next five years. In addition, manufacturing continues to improve thanks to massive investments in technology to increase productivity.

The structure of the recent price surge remains heavily skewed towards energy rather than widespread inflation. Therefore, many optimists believe it could take weeks or months for economic conditions to return to normal, provided a resolution to the conflict in Iran is reached soon.

Source: https://vtv.vn/kinh-te-my-doi-mat-cac-rui-ro-moi-100260412073318972.htm