Interest Rates , Likely to Stay High , Despite Inflation Cooling.
In December, price growth in
the United States cooled, despite the economy
continuing to show signs of weakness.
NBC reports that inflation
ended up at 6.5% compared
to the same time in 2021.
In line with expectations,
month-to-month inflation
fell by 0.1% in December.
Despite the slowing rate of inflation,
the Federal Reserve appears unlikely to pull
back from its interest rate hike strategy.
According to Federal Reserve Chair
Jerome Powell, the central bank will not stop hiking
interest rates until inflation gets closer to 2%. .
NBC reports that the economy
has been buoyed by
a strong labor market. .
According to the Bureau of Labor
Statistics, unemployment has reached
a 53-year low, dropping to 3.5%. .
However, companies are still facing
difficulty in filling positions, as evidenced
by the 10.5 million job openings in the U.S.
The high number of openings has led to an increase
in wages, however the Fed warns that the trend is
likely to translate into higher prices for consumers.
To be clear, strong wage growth is
a good thing. But for wage growth
to be sustainable, it needs to be
consistent with 2% inflation, Jerome Powell, Federal Reserve Chair, via NBC
