Washington: Slowing inflation and a cooling property sector are fueling expectations that the US central bank can adopt a smaller interest rate hike this week, as policymakers assess current efforts to rein in prices. As consumer inflation rocketed to decades-high levels last year, the Federal Reserve raised rates seven times in an aggressive campaign to cool the world's biggest economy and lower costs.
Although demand appears to be moderating and supply bottlenecks have eased, spending has been stronger than expected. This has prevented inflation from falling more rapidly and suggests the Fed's 'terminal rate' -- the level at which it will halt its increases -- remains uncertain. For inflation to come down to the Fed's target, 'we will need a little bit of softening in the labor market,' Madhavi Bokil of Moody's Investors Service told AFP.
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