The latest inflation data, which shows a 9.1% increase in prices over the last year, leads analysts to believe that the Federal Reserve goes on with its rate hike policy. This decision has not be affected by the signs of slowdown, and even recession, that the US economy is experiencing.
Although there are indicators showing a slowdown in economic growth, the labor market continues to show great strength. Wages are up 11%, with an unemployment rate that is at a historically low level: 3.6%. High inflation and a strong labor market are sufficient arguments for the Fed to maintain its rate policy.
Now, the various rates are in a range between 2.25% and 2.50%. A further rate hike, now of half a percentage point, is expected in September.
