INFLATION: The Interest Rate Balancing Act

Posted on July 27, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

***

***

Whether we’ll see another interest rate increase soon depends on what happens between now and the Fed’s next meeting in September. Jerome Powell will be watching to see if consumer prices come down more than they already have, thanks to previous rate hikes.

There are some promising signs that the worst is behind us:

  • Tomorrow, when the government releases the latest personal consumption expenditures price index—the Fed’s preferred measure for tracking inflation—it’s expected to show the lowest inflation increase since the end of 2021. And last month, the consumer price index showed inflation fell to 3%, which is above the Fed’s 2% target but an improvement from last June’s 9.1%.
  • Meanwhile, Coca-Cola—whose prices were 10% higher last quarter compared to Q2 2022—said it’s done marking up drinks for the year, and the CFO of Unilever said the packaged goods giant’s price inflation has peaked (though prices may still get higher).

But the FOMC wants more: Chairman Powell said that for inflation to be truly conquered, the job market, which currently boasts a low unemployment rate of 3.6%, will need to slow.

***

***

COMMENTS APPRECIATED

Thank You

***

***

Filed under: "Ask-an-Advisor", Breaking News, Experts Invited, Financial Planning, Funding Basics, Investing | Tagged: , , , , , , , , , |

« »

Leave a comment