PepsiCo’s and Conagra’s latest quarterly results suggest that consumers frustrated by rising prices are now spending less on established brands, particularly in the snack and soda aisles.
The June figures will qualify as another installment of the more good inflation data the central bank has been seeking. Should inflation remain low through the summer, most economists expect the Fed to begin cutting its benchmark rate in September.
Optimism is rising among economists, investors and Federal Reserve officials that U.S. inflation is nearly under control, with the latest report on consumer prices expected to show another month of mild increases.
The company disclosed the forthcoming 8% increase in the fee to gain entry into its more than 700 warehouses in the U.S. and Canada as part of a monthly sales report Wednesday.
The Federal Reserve has made “considerable progress” toward its goal of defeating the worst inflation spike in four decades, Chair Jerome Powell said in his testimony to the Senate Banking Committee.
After some persistently high inflation reports at the start of 2024, Powell said, the data for April and May “do suggest we are getting back on a disinflationary path.”
Prices for physical goods actually fell 0.4% from April to May. Gasoline prices, for example, dropped 3.4%, furniture prices 1% and the prices of recreational goods and vehicles 1.6%.
Some of America’s seniors will see their out of pocket costs fall for more than five dozen drugs—including treatments for osteoporosis and cancer—as part of the White House’s crackdown on rising pharmaceutical prices.
The policymakers’ forecast for one rate cut was down from a previous forecast of three, likely because inflation, despite having cooled in the past two months, remains persistently elevated.
Federal Reserve officials, who will end their latest policy meeting later Wednesday, are scrutinizing each month’s inflation data to assess their progress in their fight against rising prices.
Chair Jerome Powell is likely to underscore at a news conference Wednesday that the policymakers will need to see several more months of low inflation readings before they would consider reducing their key rate.
Friday’s report also showed that income growth slowed and spending cooled sharply in April, a trend that could help moderate economic growth and inflation in the coming months.
Hopes for interest rate cuts this year by the Federal Reserve are steadily fading, with a stream of recent remarks by Fed officials underscoring their intention to keep borrowing costs high as long as needed to curb persistently elevated inflation.
Target is very cognizant of the spending pullback by shoppers amid high inflation. In March, it reported its first annual decline in sales in seven years.
The latest snapshot comes as the Federal Reserve is grappling with inflation data that continues to surprise them.
Tuesday’s unexpectedly high readings may raise concerns on Wall Street, at the White House and for inflation-fighters at the Federal Reserve.
The Federal Reserve’s more cautious outlook stems from three months of data that pointed to chronic inflation pressures and robust consumer spending.
The figures highlight the toll stubborn price pressures, along with higher borrowing costs, are taking on consumers.
A measure of inflation closely tracked by the Federal Reserve remained uncomfortably high in March, likely reinforcing the Fed’s reluctance to cut interest rates anytime soon.
Despite cooling, the economy is still creating price pressures, a continuing source of concern for the Federal Reserve.
