Consumer prices rose last month at the slowest 12-month pace since December 2021, after closing out at the highest the inflation has been in 4 decades. The CPI has climbed to 7.1% for this past month of November. This track is leading to the FED to increase the interest rates by .5%. This will be the seventh consecutive rate raise just this year. These have all been aimed at lowering inflation and slowing the economy down. Inflation soared in 2021 as the economy recovered from the Covid-19 pandemic. Prices kept increasing as consumer demand was fueled by low interest rates and the government stimulus, also while there were shortages across lots of sectors for goods. They are still combating this and resolving the issue.
Interest rate continues to rise and people fear that soon we may face a financial crisis comparable to the beginning of Cover. Jobless continue to increase and I think to will result in people soon not being able to afford their mortgages. I think the Fed will most likely have to take a another approach at how they battle the CPI.
ReplyDeleteFinally the monetary policy by the fed is working and inflation is coming down. We can expect a further reduction in inflation, higher unemployment, higher interest rates and prices of homes decreasing. The market will likely get back on its feet by end of 2023 until then we will experience a recession combined with the Russia-Ukraine war; leading to an bad start for economic activity in 2023.
ReplyDeleteIt is comforting to know prices have come down. I think this is timely for the holiday season as consumption tends to increase.
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