Bad news bears for The Fed: inflation is rising as fast as it did last summer
💸 Bad news bears for The Fed: inflation is rising as fast as it did last summer.
At the fastest pace since June 2022, the Federal Reserve’s preferred inflation gauge is skyrocketing. This signals to the U.S. economy that interest rates are likely to continue to increase well into the year. The Federal Reserve increases interest rates to combat inflation because higher interest rates can help to reduce the amount of money in circulation and slow down spending. When interest rates are high, it becomes more expensive to borrow money, which can discourage businesses and individuals from taking out loans and making investments. This can lead to less spending and less demand for goods and services, which can help to reduce inflationary pressures.
Inflation in the United States has reached its lowest point since early 2021, providing some relief to households after two years of high prices.