Inflation rates are declining –the fed won’t increase interest rate hikes
Pickert and Saravia 7-12 [Reade and Augusta; Reade; U.S. ECONOMY REPORTER AND EDITOR WITH BLOOMBERG NEWS – BA in economics from Virginia; Augusta; Economics reports for Bloomberg news – M.S in Journalism from Northwestern and BA in international studies; 7-12-2023; "US Inflation at 3% Signals Turning Point for Fed Rate Hikes"; Bloomberg News ; https://www.bloomberg.com/news/articles/2023-07-12/inflation-at-3-flags-end-of-emergency-turning-point-for-fed; Accessed via Archive.ph at - https://archive.ph/96QIb]//LASA-بيلال
The US inflation rate slid to a more than two-year low, a major step toward ending the cost-of-living emergency — and possibly the Federal Reserve’s historic monetary tightening, too.
At 3% last month, consumer-price inflation is now just one-third of the level it reached a year ago, which was the highest in four decades. And the details for June were also better than expected, with key measures of underlying inflation coming in below forecasts.
Inflation in US Decelerates by More Than Forecast
[FIGURE ONE OMMITED]
That’s after a period of two years or so when the great inflation debate hogged the headlines and loomed large in everything from US presidential politics to bar-room conversations.
None of this means it’s game over in the fight against price pressures — especially for the Fed, which is widely reckoned to be locked-in to another interest-rate increase later this month. Still, there’s now a better-than-even chance that a July 26 hike, which would take the benchmark US rate to 5.5%, could be the last in quite a while.
That’s the way markets were betting after Wednesday’s data. Yields on short-term Treasury yields plunged, stocks rose, and the dollar was headed to the lowest in more than a year by one measure – all in anticipation that the Fed might ease up.
‘Coming to End’
“The new data could give the Fed reason to debate whether any further rate hikes after this month are needed,” wrote Ryan Sweet, chief US economist at Oxford Economics. “This tightening cycle by the Fed is likely coming to an end.”