“As inflation continues to ease, the Fed must avoid unnecessary and potentially recession-inducing rate hikes,” Rep. New York Fed President John Williams and Philadelphia Fed President Patrick Harker – both of whom are voting members of the Fed’s policy-setting committee – have signaled that it might be time for the central bank to hold rates steady. Michelle Bowman said she expects additional rate increases will be necessary to bring inflation back in line with the Fed’s two percent goal. Democratic leaders are increasingly anxious that the Fed might overshoot its target, raising rates too high and choking off the labor market and growth.Įarlier this week, Fed Gov.
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The latest inflation data arrives as Federal Reserve policymakers begin to chart divergent paths over how to address inflation moving forward. Still, “most of what people spend their money on continues to go up in price, perhaps explaining why consumers aren’t as optimistic as economists about the recent disinflationary data,” Omair Sharif of Inflation Insights said in a research note before the release of the report. “Inflation has eased since, and people’s attitudes and views have improved quite a bit,” she said. Unsurprisingly, Democrats have a sunnier outlook than independents or Republicans, but there have been gains among all three groups, according to the most recent University of Michigan consumer survey. “Annual inflation has fallen by around two-thirds since last summer, and inflation outside of food and energy has fallen to its lowest level in any three-month period since September 2021,” the White House said in a statement. That may partially explain why polls have given Biden low marks on his policies, even though economic growth has been surprisingly resilient and the job market remains solid.Įconomic attitudes are also particularly sensitive to political flare-ups, Hsu noted, adding that sentiment dipped around the time of the debt ceiling battle in May, though it has climbed since then. Overall, consumer prices have jumped by around 17 percent since February 2020.
While the cost of key goods and services has stabilized, prices at grocery stores, restaurants and the gas pump are still much higher than they were before Covid-19 rocked the economy. Americans give more weight to their ability to stretch their income than to federal data on inflation.
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