Kenny Porcari, chief market strategist at Slatestone Wealth, responded to Jamie Dimon's comment on “The Big Money Show” that high Fed interest rates could lead to a recession.
A closely watched inflation report on Thursday is expected to show progress in combating price pressures in the economy slowed in December.
Economists expect the consumer price index, which measures a wide range of goods including gasoline, health care, groceries and rent, to post a 3.2% rise in monthly prices in December, exceeding the 3.1% rise recorded in the previous month. There is.
monthly, inflation is seen It rose 0.2%, higher than in November, due to higher energy prices.
Rising childcare fees are starting to take a toll on our family.
Other parts of the report are also expected to note a slowdown in the decline in inflation. Core prices, which exclude the more volatile measures of food and energy, are projected to rise by 0.3% annually, or 3.8%. These numbers are little changed from November, suggesting that underlying price pressures remain strong.
The Fed's target interest rate is 2%.
“December's consumer price index will be closely watched to see whether the improvement on the inflation front continues or whether it has stalled,” said Greg McBride, chief financial analyst at Bankrate. Ta. “Core CPI has been consistently declining at 4%, but is still far from 2%.”
As high inflation weighs down Americans, 401(K) withdrawals from those in need surge.
A customer visits a supermarket on December 12, 2023 in San Mateo, California. (Photo credit: Li Jianguo/Xinhua News Agency via Getty Images/Getty Images)
The central bank will be watching the report closely for evidence that inflation is finally calming as policymakers seek to cool the economy with a series of aggressive interest rate hikes. Authorities have approved 11 rate hikes since March 2022, taking the benchmark federal funds rate from near zero to its highest level since 2001.
Fed officials have signaled in recent weeks that they are done raising rates, but have given little guidance on when they might start cutting rates. A better-than-expected report could mean the central bank won't cut rates as soon as the market currently expects.
“CPI data could drive pricing in the federal funds market,” Bank of America analysts said in a note to clients. “If the outlook is in line with our expectations, the rate cut in March will be maintained.”
Central bank officials are also considering increase in employment Consumers' inflation expectations in determining monetary policy.
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Inflation is putting severe economic pressure on most American households, forcing them to pay for necessities like food and rent. The burden falls disproportionately on low-income Americans, whose paychecks are already tight and are highly exposed to price fluctuations.
Although the inflation rate has fallen from its peak of 9.1%, the consumer price index has increased by a staggering 17.62% compared to January 2021, just before prices began to soar.
