7/12/2023 0 Comments Wholesale sketch books![]() ![]() ![]() “Given how far we have come, it may make sense for rates to move higher but at a more moderate pace,” he said. Future increases would probably be in small steps of only a quarter percentage point and occur less frequently, Powell said. “You’re just not seeing a lot of progress, not the kind of progress we want to see,” he said.īut there’s been enough improvement for Fed officials to take a break from raising interest rates after already ratcheting down the size of those hikes this year from the three-quarter percentage point ones of 2022. Powell echoed Dynan’s concerns about core inflation. “It really depends on the path of inflation.” “I think it’s probably a tossup as to whether we’ll see a recession later this year or early next year,” Dynan said. That indicates consumer demand remains strong and the Fed still might need to raise interest rates more in the coming months, which could push the nation closer to a recession, she said. The core consumer price index was 5.3 percent higher in May compared to a year earlier. And that means there’s still the risk of a recession before the 2024 election.ĭynan warned that core inflation, which removes food and energy prices to give a less-volatile reading, hasn’t eased for several months. But the Fed, which operates independently from the White House, wants annual inflation to run at 2 percent, so there’s still a ways to go to get back to normal. and it’s kind of what I would call more of a wait and see thing for two or three months to just observe how things are playing out.”Īvoiding a recession would be a boost to President Biden’s reelection campaign and he trumpeted the new inflation data on Tuesday. The economy is still holding up pretty well. Inflation’s going in the right direction. “I think there’s a window here for the Fed to pause. “The economy’s on the right track,” said Boston College economist Brian Bethune. And the labor market remains strong, with 339,000 jobs created in May and the unemployment rate, although rising, remaining below 4 percent. Data released Wednesday morning also showed continued improvement in inflation at the wholesale level. The consumer price index rose at an annual rate of 4 percent in May from a year earlier, well off the 9.1 percent clip it peaked at last June. The government reported this week that a key inflation measure continued to improve after hitting a four-decade high a year ago. Eccles Federal Reserve Board Building in Washington, D.C. There have been encouraging signs recently that the Fed could pull off that extremely difficult task. The Fed is trying to get that calculus correct and execute what’s known as a soft landing for the economy: raising interest rates just enough to bring inflation back to normal without triggering a recession. That helps reduce inflation but also risks a recession if the slowdown goes too far. Higher borrowing costs slow economic growth by reducing spending. The Fed’s rate is a benchmark for consumer and business loans from banks. So Fed officials projected they would need to raise their benchmark interest rate to 5.6 percent by the end of the year. Those developments would likely push prices higher. And the continued solid job market means employers will have to raise wages to lure new workers and keep the ones they have. The improved economic growth signals that consumers will keep spending. But that’s not a recipe for significantly reducing inflation. ![]() 12 Wholesale Sketch Book - at - arrow burger cart close info phone print search soc-fb soc-insta soc-tw user warehouse wishlist Adobe Illustrator 25.Those changes are positive overall, meaning a recession is not on the horizon and fewer people will lose their jobs. ![]()
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