The Federal Reserve on Wednesday signaled that it intends to use both conventional and unconventional tools to address risks to the economic outlook caused by inflation even as the economy remains short of full employment. The major changes to the Federal Open Market Committee statement released after the FOMC's meeting imply that policy normalization ... READ MORE >
inflation
FOMC preview: Shaping expectations for a major policy shift
The policy objective at Wednesday’s meeting of the Federal Open Market Committee will be to prepare market participants for the major shift in policy that lies ahead: a rate hike in March, another in June, and a balance sheet runoff likely to start in June or July. Policymakers and investors should anticipate no change in the policy rate but should ... READ MORE >
Canada inflation highest since 1991 as supply chain disruptions continue
Canada’s consumer price index hit 4.8% in December, the highest since 1991 as supply chain disruptions continued, according to data released by Statistics Canada on Wednesday. The inflation is driven by supply chain disruptions, pent-up demand and inflation expectations. While pent-up demand is expected to ease as pandemic spending winds down, supply ... READ MORE >
Americans’ real earnings are higher today than before the pandemic
Even as prices have soared in recent months, American workers are earning more than they did before the pandemic as the overall gains in their wages have outpaced inflation over the past two years. The real average hourly wage rate in December—which is adjusted for inflation and is an indicator for purchasing power—was 1.6% above the pre-pandemic ... READ MORE >
Price stability now a paramount concern as inflation hits 7%
Price stability: Learn it, know it and love it because that is what the Federal Reserve will be talking about over the next two years as the central bank attempts to craft a soft landing following an increase in the Consumer Price Index to a 7% annual rate in December. The Consumer Price Index data released on Friday, though, implies anything but ... READ MORE >
Chart of the day: Inflation and labor shortages pressure small businesses
Inflation and labor shortages continued to put pressure on small businesses as the Small Business Optimism Index in December remained below its pre-pandemic level, up only 0.5 points to 98.9, according to a report from the National Federation of Independent Business on Tuesday. Nearly a quarter, or 22%, of all surveyed firms saw inflation as "the most ... READ MORE >
Monetary and fiscal policy in a changing economy: The Fed’s mandate for price stability
This is the second of four articles examining monetary and fiscal policy and the Federal Reserve’s response to the most significant issues of today’s economy. The first article examined the Fed’s challenge in meeting its mandate for full employment. In the year ahead, the economy and financial markets will be influenced by how the Federal Reserve strikes ... READ MORE >
Consumer confidence improves despite concern over omicron variant and inflation
Consumer confidence advanced in December for the third month in a row, driven by a strong labor market and recovery in spending since September, despite risks from the omicron variant and inflation. The headline consumer confidence index rose by 3.9 points to 115.8 on the month, the largest increase in three months and the highest since July, ... READ MORE >
U.S. November retail sales: Consumer spending moderates
The American consumer has held up remarkably well during the recent surge in inflation. But that was not the case in November as the pace of spending moderated to an 0.3% increase, which is likely because of an adjustment to rising prices, according to government data released Wednesday. The October top-line estimate was revised up to a 1.8% gain, ... READ MORE >
U.S. Consumer Price Index: Inflation broadens out as shelter costs rise by 4.8%
November inflation data, rising by 6.8% on the year, offered no relief for American households as energy and transportation costs continued to drive prices higher. While there is some relief over the horizon on both fronts—falling oil and gasoline prices, as well as the return of North American auto production—investors and policymakers are turning ... READ MORE >