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Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account The optimism reflected in the survey means US consumers have faith that inflation will eventually slow to a sustainable level, which the Fed defines as 2% inflation.īut consumers face a tough economic landscape in the future as they run down their savings accounts, rack up more debt, begin to pay off their student loans, large companies continue to tighten their belts, and the Fed raises rates a bit more. That’s the lowest level since March 2021. Year-ahead inflation expectations retreated for the second consecutive month, according to the University of Michigan, falling to 3.3% in June from 4.2% in May. The jobs report next week will be a key piece of data that will inform officials for their July decision.Ĭonsumers’ expectations for inflation remain “well-anchored,” as Powell has frequently noted. Signs of enduring strength in the labor market and the broader economy might embolden the hawks of the Federal Open Market Committee, the Fed group that sets monetary policy. From European Central Bankįed Chair Powell: Not ruling out back-to-back rate hikes Jerome Powell participates in a panel with other central bankers hosted by the European Central Bank in Sintra, Portugal, on June 28. Much of that is due to the labor market remaining robust, propping up inflation in the labor-intensive services sector, Fed Chair Jerome Powell said in a panel hosted by the European Central Bank this week. More action from the Fed is centered on core inflation remaining stubbornly high and not decelerating as fast as the headline number. Most Fed officials estimate that two more quarter-point rate hikes will occur this year and don’t expect inflation to reach the central bank’s 2% target until 2025. The resumption of student loan payments this year, in addition to the Supreme Court blocking President Joe Biden’s student loan forgiveness program, also spells economic pain for Americans.Īnd the Fed isn’t done raising interest rates just yet. The Fed is still focused on slowing the economyīank of America CEO Brian Moynihan told CNN in an exclusive interview this week that he expects the US economy to slip into a recession in “the first part of next year” instead of later this year as he previously estimated.
#Worried about inflation here are optimism full
Still, economists expect the economy to lose steam in the months ahead, but a full blown recession this year is anything but assured. Revised data released Thursday showed the economy was stronger than previously thought in the first three months of the year and consumer spending remained in positive territory in May for the sixth straight month, according to the Commerce Department. The Commerce Department reported Friday that the Personal Consumer Expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 3.8% in May from a year earlier, down from April’s 4.3% annual rise. The Fed's favorite inflation gauge shows prices rose just 0.1% last month (Photo by Gary Hershorn/Getty Images) Gary Hershorn/Corbis News/Getty Images

Pizza on June 25, 2023, in New York City. NEW YORK, NY - JUNE 25: People eat at tables on the sidewalk outside Prince St.
