Inflation lowest since 2021 before pivotal Federal Reserve meeting
Jun 12, 2023, 3:39 PM
Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, DC, on May 3, 2023. (Photo by Saul Loeb via Getty Images)
(Photo by Saul Loeb via Getty Images)
One-year inflation expectations are down 0.3%, dropping to a 4.1% rate — the lowest annual outlook since May 2021, according to the in May.
“The Fed wants that number to come down to under 4% pretty quickly,” , a CBS News Business Analyst, told Seattle’s Morning News on 成人X站 Newsradio. “And just as a reminder, before the pandemic, inflation was sub 2%. So we still have a lot of ways to go, but we’ve made progress.”
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The U.S. Federal Reserve will set the target for short-term interest rates through a two-day Federal Reserve meeting concluding June 14, Schlesinger informed, where it could be the first time the Fed chooses to hold interest rates steady in 18 months.
“What is really going to be interesting is that the Fed has basically telegraphed to us that it intends to wait and see how the economy absorbs these 10 consecutive interest rate increases and that it will do nothing,” Schlesinger said.
“But, there are some people who are still worried that it’s not just about inflation, it’s about banks not lending as much and that could hurt the economy,” Schlesinger continued. “So the Feds kind of walking a tightrope right now, and we’re going to be very intent on listening to what the Fed Chair Jerome Powell says at his press conference.”
Interest rates tend to move in the same direction as inflation as a response because interest rates are the government’s primary tool to manage inflation. Since 2012, the Federal Reserve has targeted an annual inflation rate of 2%.
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“As much as we think the Fed knows, the Fed has not actually been so great at predicting the short- and intermediate-term of what’s going on in the economy,” Schlesinger added. “I’d also like to point out that it has been a very strange three years. These pandemic years have really distorted the economy, but I do think that the Fed probably is done raising interest rates.”
But, according to a聽 survey released by the National Association for Business Economics, economists have pushed back their expectations of when the Federal Reserve will cut interest rates to 2024.
Listen to Seattle’s Morning News with Dave Ross and Colleen O’Brien weekday mornings from 5 – 9 a.m. on 成人X站 Newsradio, 97.3 FM. Subscribe to the podcast here.
