2023-06-13 22:04:18
DECRYPTION – Despite the rate hikes, the strength of employment is baffling economists and complicating the Fed’s task.
Washington Correspondent
Perplexed by the contradictory signals given by the American economy, the Federal Reserve (Fed) seems ready to kick into touch. A majority of traders see the central bank not touching its key rate at the end of its monetary committee meeting on Wednesday evening. It would prefer to wait until July 26, the date of its next meeting, to possibly raise again the rate at which it lets banks lend each other very short-term liquidity.
After fourteen months of vigorous increases, the Fed Funds rate rose from zero to 5-5.25%. However, the effects of this rapid adjustment are far from having manifested themselves in all circuits of consumption and investment. For the moment, to the surprise of many, employment, consumption and, unfortunately, inflation, are resisting the shock therapy rather much better than expected. Since the beginning of this restrictive monetary policy, month after month, job creations
#Inflation #United #States #holding