The US economy expanded at a modest to moderate pace from January to mid-February as inflation pressures remained elevated and employers continued to struggle to find workers, a Federal Reserve report showed on Wednesday.
The mixed picture illustrated in the central bank’s latest survey of business contacts across the country reflects broader economic data that showed a booming job market in January despite a rise in COVID-19 cases, inflation which stands at the highest level in the last 40 years and a fight for workers with wages rising at the fastest rate in many years.
“Companies reported that they expect additional price increases in the coming months, as increases in input costs continue to be passed on”, the Fed said in its survey, known as “beige book”, which was held in its 12 districts from the end of January to February 18.
The Fed remains on track to raise interest rates from near zero, where they have been since the start of the pandemic, as it begins a cycle of monetary tightening to curb inflation.
The president of the fedJerome Powell said Wednesday that he is “inclined to propose and support a 25 basis point rate hike” at the central bank meeting in two weeks, but would be prepared to act more aggressively at meetings later in the year if inflation does not decline as fast as expected.
However, Powell He added that the economic outlook for the United States had become very uncertain following Russia’s invasion of Ukraine and that the fed will proceed with caution.
Source: Gestion
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