Fed unleashes another big rate hike in bid to curb inflation
The Fed is tightening credit even while the economy has begun to slow, thereby heightening the risk that its rate hikes will cause a recession later this year or next.
The Fed is tightening credit even while the economy has begun to slow, thereby heightening the risk that its rate hikes will cause a recession later this year or next.
When it ends its latest policy meeting Wednesday afternoon, the Fed is expected to impose a second consecutive three-quarter-point hike in its benchmark interest rate, raising it to a range of 2.25% to 2.5%.
House and Senate Republicans in the Indiana General Assembly remain on a collision course over how to provide inflation relief for Hoosiers after committees from both chambers passed bills that take vastly different approaches.
Unilever, which owns 400 consumer brands ranging from Ben & Jerry’s ice cream to Dove skin care, raised prices by more than 11% between April and June as inflation surged around the world.
The Conference Board said Tuesday that its consumer confidence index fell largely due to consumer anxiety over the current economic conditions, particularly four-decade high inflation.
Walmart’s move to lower its profit outlook in the middle of the quarter is rare and raised worries about how inflation, the highest in 40 years, is affecting the entire consumer sector.
Treasury Secretary Janet Yellen spoke just before a slew of economic reports will be released this week that will shed light on an economy currently besieged by rampant inflation and threatened by higher interest rates.
While people taking on multiple jobs is typically a sign of a healthy job market where workers have more job opportunities available, it is also a sign of increasing financial strain on Americans’ pocketbooks.
Farmers and agricultural experts say the continued effects of the pandemic, government policy decisions and far-reaching impacts of Russia’s invasion of Ukraine are also contributing factors.
Nine of the 13 retail categories showed increases last month, according to the report, including furniture stores, e-commerce and sporting-goods stores.
Such an increase would mark a further ramping up of the Fed’s rate hikes as it intensifies its fight against accelerating inflation. The Fed hasn’t raised its rate by 1 percentage point in several decades.
Last month’s jump in wholesale inflation was led by energy prices, which soared 54% from a year earlier.
The latest inflation reading was supposed to offer hope that the U.S. economy had weathered the worst of the storm. But there was nothing reassuring in Wednesday’s report.
Investors upped bets the central bank could make a one percentage-point rate hike at its July 26-27 meeting—which would be the largest increase of the modern Federal Reserve era.
Rising costs have seeped into nearly every corner of the economy, with grocery prices jumping 12.2% compared with a year ago. Rents have risen 5.8% and new car prices have increased 11.4%.
The consumer price index probably increased 8.8% in June from a year earlier, marking the largest jump since 1981, according to the median forecast in a Bloomberg survey.
St. Louis Federal Reserve President James Bullard said he currently supports a 0.75 percentage point increase in the Fed’s benchmark short-term interest rate at its next meeting later this month.
A recent report from the Associated General Contractors of America states that, from April 2021 through the first quarter of 2022, the price of nonresidential construction components, or inputs, has risen 21%. Among those inputs, diesel fuel has jumped 86%; plastics, 30%; and insulation products, 19.6%.
The surprisingly strong gain will likely spur the Federal Reserve to keep raising interest rates to cool the economy and slow price increases.
Inflation tightened its grip on businesses and consumers during the second quarter and investors expect to see a dent in the latest round of corporate earnings.