Gas station signboards in Bethesda, Maryland displayed prices on August 6, 2023. Thursday’s consumer price index report is expected to show a slight easing of price increases, but not enough to alter the Federal Reserve’s stance on fighting inflation. According to the consensus among Wall Street analysts, the consumer price index for July is predicted to increase by 0.2% and the 12-month rate to be 3.3%. Although this is significantly lower than the 8.5% rate of the previous year, inflation still remains a concern. Mark Zandi, chief economist at Moody’s Analytics, believes that inflation is moving in the right direction, but caution is still necessary. He anticipates that inflation will continue to decrease and reach the Federal Reserve’s target of 2% by 2024. However, there are potential risks such as rising health insurance costs and high gas prices. Despite the recent trends, Zandi believes that the Federal Reserve should refrain from raising interest rates further until they are certain that inflation will reach the target level. On the other hand, former Fed Governor Richard Clarida argues that the current rate-hiking cycle should continue to combat inflation and emphasizes the importance of acknowledging the improving data. The rate hikes have had minimal impact on the macro economy, with GDP experiencing positive growth. However, the micro economy, particularly small businesses and household debt levels, has been negatively affected. Small businesses are facing increasing loan default rates, resulting in a credit crunch. The Federal Reserve has been accused of hindering small business growth and creating an unfair playing field. If the data continues to support it, the Federal Reserve may consider pausing the rate increases. The CPI report will provide more insight into the state of inflation, focusing on components such as shelter, healthcare, energy, food, core services, and appliances. While some indicators suggest a potential softening of inflation, the bond market’s forward rate remains high, causing concern for businesses and consumers. High interest rates may lead to an increase in credit card debt and small business debt defaults. It is expected that delinquency rates will continue to rise in the near future before showing any improvement.
High prices continue to pose a problem
Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – swifttelecast.com. The content will be deleted within 24 hours.