Despite a rise in overall inflation because of higher oil prices, core inflation and spending volume were softer in August, adding to the optimism projected by the Federal Reserve recently that the economy can achieve a soft landing. The personal consumption expenditures price index—the Fed's preferred ... READ MORE >
inflation
FOMC policy decision: No rate hike as Fed implies soft landing
The Federal Reserve maintained its policy rate in a range between 5.25% and 5.5% on Wednesday while revisions to its Summary of Economic Projections strongly imply that the central bank no longer expects a recession, which it did just six months ago, and is increasingly confident of a soft landing in the ... READ MORE >
Canada inflation surges 4%, exceeding forecasts
Inflation in Canada spiked far more than forecast in August, raising the prospect of another interest rate increase by the Bank of Canada. Even though inflation was expected to increase because of rising gas prices, higher rents and comparisons to the moderate levels of a year ago, the 4% ... READ MORE >
Low core inflation should keep the Fed from hiking rates
While we expect the Federal Reserve to hold rates unchanged on Wednesday, what its updated Summary of Economic Projections will look like remains less clear. More likely than not, given the recent robust economic data, we might see higher growth and inflation reflected in the summary along with an ... READ MORE >
Energy pushes inflation higher but core prices remain grounded
Consumer inflation in August posted the biggest monthly increase in more than a year, driven mostly by the surge in oil and energy prices, the Bureau of Labor Statistics reported on Wednesday. But core inflation—which has more policy implications—grew slightly faster at 0.3% or 2.8% on a ... READ MORE >
Why the Fed should lift its 2% inflation target
We think that the Federal Reserve’s current cycle of rate hikes has peaked at a range between 5.25% and 5.5%. While inflation stands well above the Fed’s official 2% target, we think that because of the economic and political shocks since the pandemic, the Fed will raise its inflation target in the ... READ MORE >
Bank of Canada holds rates steady amid a cooling economy
The Bank of Canada kept its policy rate at 5% on Wednesday as the unexpected contraction of the economy in the second quarter gave a clear message of a cooling economy. The central bank’s decision to keep rates steady also suggested that its campaign of rate increases might be over, rendering a rate ... READ MORE >
Personal spending grows hot in July as inflation stabilizes
American consumers remained in a position of strength on spending and income growth this summer as inflation stabilized further and the labor market stayed resilient. July's personal spending surged by 0.8% while personal income grew by 0.2%, the Bureau of Economic Analysis reported on Thursday. With ... READ MORE >
Consumer products M&A cooled in the first half
Merger and acquisition activity among consumer products companies took a breather in the first half of the year as valuations were reset amid rising interest rates. Closed deal activity declined by more than 25% over the same period a year earlier, driven not only by the reset in valuations but ... READ MORE >
Producer prices, consumer sentiment data show signs of more price stability
Producer price data and consumer sentiment data released Friday showed signs of more price stability, and this good news on the inflation front should keep the economy on track to grow in the third quarter. The producer price index was up 0.3% in July after June's downward revision, according to the ... READ MORE >