Fed rate hikes: Cause for pause?
Fed watchers see potential for a pause in rate increases, but recent reports show the economy still runs hot.
The 12-month changes in the consumer price index (CPI) climbed further in May to a 40+ year high. The lagged impacts of rapid money growth plus global supply shocks from the war in Ukraine and the rolling shutdowns of production in China continue to drive up food, energy, and commodity prices. Rapid inflation has also led to more hawkish pronouncements from central banks with the European Central Bank (ECB) setting the stage for reducing accommodation while the Fed is set to continue hiking rates this week.
The employment report for May showed how tight the labor market remains. Nationwide’s Chief Economist David Berson and Senior Economist Ben Ayers take a closer look at current employment conditions.
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