Inflation

The Federal Reserve will likely need to raise interest rates further and hold them higher for some time if US price pressures don't cool off and the jobs market shows no sign of slowing.

It's a debate that matters more than ever, as bond traders ponder the end of the Federal Reserve's aggressive campaign of interest-rate hikes and wager on cuts starting within months.

Economists lowered their projections for the consumer price index as well as the personal consumption expenditures price index for every quarter through the first half of 2024, according to the latest Bloomberg monthly survey.

As the US economy veered toward the biggest inflation shock in four decades, investors flocked to the one corner of Wall Street that seemed a sure-fire refuge.

During a visit to Buffalo on Friday, New York Federal Reserve President John Williams said the central bank may need to keep cranking up interest rates to gain greater control over high inflation.

It’s not yet time to position for a recession and investors should instead focus on adjusting asset allocation to surging inflation, according to UBS Global Wealth.

An overly aggressive path of hikes to combat the spiraling cost of living may backfire. Bringing inflation down to 2% could push unemployment to nearly 10%.

It’s the latest indication of rapid inflation in the U.S., and prices are poised to accelerate further after Russia’s invasion of Ukraine sent prices of some raw materials to new highs.

The consumer price index jumped 7.9% from a year earlier following a 7.5% annual gain in January, Labor Department data showed Thursday. The widely followed inflation gauge rose 0.8%.

Energy prices are complicating the task for policy makers, who face a delicate balancing act in tightening to curb inflation without killing the economic recovery.