In recent weeks, several Fed officials have said they worry that the still-brisk pace of job growth will lead workers to demand higher pay to make up for two years of inflationary prices. Some economists think the Fed might decide to forgo a rate increase in September before weighing a possible hike at its meeting in November. 19-20, Powell noted, they will have much more data in hand: Two more inflation reports, two reports on hiring and unemployment and updated figures on consumer spending and wages. When the officials last met in June, they signaled that they expected to raise rates twice more. He stressed that the Fed’s policymakers will assess a range of incoming economic data in determining what action, if any, to take at their next meeting. And so we think we need to stay on task.” “Core inflation is still pretty elevated. “We want core inflation to be coming down,” Powell said. The Fed’s rate hikes, he said, have “not been restrictive enough for long enough” to exert their full effect. Powell made clear that the fight against inflation isn’t over. The key question swirling around the Fed is whether Wednesday’s increase will or won’t be its last. “We’re going to be careful about taking too much signal from a single reading,” he said. But he said additional such data would be needed to show that inflation is declining in a sustained way. Powell said he welcomed, in particular, a milder-than-expected report on inflation for June. Yet a “core” inflation measure that is preferred by the Fed, which excludes volatile food and energy costs, was still up 4.6% in May from a year earlier. Year-over-year inflation in June was 3%, according to the government, down sharply from a peak of 9.1% in June 2022. With consumer confidence hitting its highest level in two years, Americans keep spending - crowding airplanes, traveling overseas and flocking to concerts and movie theaters. Though inflation has reached its slowest pace in two years, Wednesday’s hike reflects the concern of Fed officials that the economy is still growing too fast for inflation to fall back to their 2% target. ![]() ![]() “My base case is that we will be able to achieve inflation moving back down to our target without the kind of really significant downturn that results in high levels of job losses,” the Fed chair said.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |