Fed set for another big rate hike with economy on knife's edge

, avoiding an economic downturn will require luck and depend on many factors outside the Federal Reserve's control.

Despite a healthy job market with near-record low unemployment, workers are seeing their wage gains overwhelmed by sky-high consumer prices that rose by a new 40-year high of 9.1 per cent in June. After flooding the world's largest economy with support during the pandemic - zero interest rates and a steady stream of liquidity into the financial system - Fed policymakers were congratulating themselves on how quickly the economy recovered, regaining millions of jobs in a matter of months.

Higher lending costs make it more expensive to borrow funds to buy cars and homes or expand businesses, which should cool demand, while also making it more attractive to save rather than spend. The equivalent amount of tightening in a single move hasn't been seen since the early 1980s, when then-Fed chief Paul Volcker was on a crusade to crush a wage-price inflationary spiral.But even Waller noted that it is important not to move too fast, and a full point hike would only be called for if data continue to show accelerating price increases.

Housing prices have skyrocketed, hitting new records repeatedly, even as interest rates have risen, and consumer spending continues to increase, leading some economists to warn of a contraction in the second quarter.

He having covid? Coughing?

It is disingenuous to say the inflation was caused by citizens spending government stimulus.

Singapore Latest News, Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

China confident of resolving impact from Fed tightening - forex regulatorSHANGHAI : China is confident of resolving the impact of monetary policy tightening by the U.S. Federal Reserve and has the basis to do so, the foreign exchange regulator said on Friday.The regulator will closely monitor the pace of Fed policy adjustments, Wang Chunying, spokeswoman of the State Administr
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Euro set for best week since May after ECB opts for big hikeTOKYO : The euro headed for its best week since May on Friday after the European Central Bank (ECB) raised borrowing costs more than expected overnight in its first rate hike since 2011.However the single currency was well off Thursday's knee-jerk peak after ECB President Christine Lagarde said that while
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Source: BusinessTimes - 🏆 15. / 51 Read more »

Not your usual European adventure: Paragliding in Slovenia’s Vipava valley on a ‘hike-fly-wine’ tourThis unique tour takes visitors to boutique vineries via an aerial excursion over hills and forests. The Financial Times’ Camilla Bell-Davies takes a leap of faith.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Asian stocks set for best week in two months; dollar heavyTOKYO : Asian stock markets were on course for their best week in months and the dollar held off recent record highs after the European Central Bank (ECB) raised rates for the first time in more than a decade and bets on the size of U.S. rate hikes eased. Japan's Nikkei rose 0.24 per cent on Friday and wa
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

China confident of resolving impact from Fed tightening - forex regulatorSHANGHAI : China is confident of resolving the impact of monetary policy tightening by the U.S. Federal Reserve and has the basis to do so, the foreign exchange regulator said on Friday.The regulator will closely monitor the pace of Fed policy adjustments, Wang Chunying, spokeswoman of the State Administr
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »