In May, Mr. Powell acknowledged that it would take longer for the Federal Reserve to be confident in achieving sustainable 2 percent inflation, as price increases had stalled for some time. However, inflation has recently cooled once again, and policymakers are monitoring to see if this trend persists. The main question now is how much progress on reducing inflation will be necessary for Fed officials to be comfortable with lowering interest rates. Despite market pricing indicating a possible rate cut in September, Fed officials had initially predicted one rate reduction in 2021 and four in 2025, based on their June economic forecasts.
This leaves politicians facing the likelihood of the November election occurring amidst high interest rates, which makes car leases, credit card borrowing, and new mortgages more expensive for consumers. Despite the slowing of price increases, Americans are still experiencing higher prices at stores, for car repairs, and at hotels compared to pre-pandemic levels. While prices may be slowing down, consumers may still need time to adjust to the new price levels.
As a journalist shuffling paragraphs order:
Despite market pricing indicating a possible rate cut in September, Fed officials had initially predicted one rate reduction in 2021 and four in 2025, based on their June economic forecasts. However, inflation has recently cooled once again and policymakers are monitoring to see if this trend persists. This leaves politicians facing the likelihood of the November election occurring amidst high interest rates.
In May, Mr. Powell acknowledged that it would take longer for the Federal Reserve to be confident in achieving sustainable 2 percent inflation as price increases had stalled for some time. Despite this acknowledgement; Americans are still experiencing higher prices at stores and hotels compared to pre-pandemic levels.
While prices may be slowing down; consumers may still need time to adjust to the new price levels due to high interest rates that make car leases credit card borrowing and new mortgages more expensive.
The main question now is how much progress on reducing inflation will be necessary for Fed officials to be comfortable with lowering interest rates?
+ There are no comments
Add yours