Nearly every country in the world has a central bank – a public institution that manages a country’s currency and its monetary policy. And these banks have an extraordinary amount of power. By controlling the flow of money and credit in a country, they can affect economic growth, inflation, employment and financial stability – all […]
Policymakers now expect only one rate cut in 2024
It was a double-whammy Wednesday for economic-data enthusiasts. During the morning of June 12, 2024, the Bureau of Labor Statistics published its latest inflation figures. The news was relatively good, showing that inflation rose 3.3% in the year to May 2024 – less than some analysts had expected. A few hours later, the Federal Reserve […]
Latest inflation figures are good news – even if they give a lot of people heartburn
The U.S. economy is slowing, but not crashing. In the dismal science, this is what counts as good news. That’s the message I took away from the latest inflation data, released May 15, 2024, which showed U.S. consumer prices rising 3.4% in the 12 months to April 2024. This is down slightly from the 3.5% […]
Fed faces twin threats of recession and financial crisis as its inflation fight raises risks of both
There is wide agreement among economists and market observers that the Federal Reserve’s aggressive interest rate hikes will cause economic growth to grind to a halt, leading to a recession. Less talked about is the risk of a financial crisis as the U.S. central bank simultaneously tries to shrink its massive balance sheet. As expected, […]
Fed likely to stay the course on interest rate hike as inflation ticks up but gas prices ease
The Federal Reserve received mixed news in the latest data on U.S. inflation as it mulls another rate hike. Consumer prices rose 8.3% in August from a year earlier, data released on Sept. 13, 2022, shows. While this pace is down from the 8.5% annual gain experienced in July, it’s still higher than what some […]
Rural Americans aren’t included in inflation figures – and for them, the cost of living may be rising faster
When the Federal Reserve convenes at the end of January 2023 to set interest rates, it will be guided by one key bit of data: the U.S. inflation rate. The problem is, that stat ignores a sizable chunk of the country – rural America. Currently sitting at 6.5%, the rate of inflation is still high, […]
Poorest Americans are hit hardest by soaring prices on necessities
The fastest rate of inflation in 40 years is hurting families across the U.S. who are seeing ever-higher prices for everything from meat and potatoes to housing and gasoline. But behind the headline number that’s been widely reported is something that often gets overlooked: Inflation affects different households in different ways – and sometimes hurts […]
Swelling grocery bills are pummeling the poorest – who spend over a quarter of their incomes on food
CC BY-ND The cost of eggs and bread is soaring – a trend that’s particularly punishing for the poorest Americans. Average food prices climbed an annualized rate of 10.4% in June, the Bureau of Labor Statistics reported on July 13, 2022. The gains were driven primarily by the cost of groceries, which jumped the most […]
Federal Reserve bows to bank-crisis fears with quarter-point rate hike, letting up a little in its fight against inflation
The Federal Reserve raised interest rates by a quarter-point on March 22, 2023, bowing to market expectations that it would temper its aggressive program of rate hikes amid a still-brewing banking crisis. The U.S. central bank lifted rates to a range of 4.75% to 5%, its ninth-straight increase since March 2022. As late as early […]
Jobs are up! Wages are up! So why am I as an economist so gloomy?
In any other time, the jobs news that came down on Dec. 2, 2022, would be reason for cheer. The U.S. added 263,000 nonfarm jobs in November, leaving the unemployment rate at a low 3.7%. Moreover, wages are up – with average hourly pay jumping 5.1% compared with a year earlier. So why am I […]