Former Kansas City Federal Reserve Bank President Thomas Honig responded to Jerome Powell’s comments on “Cavuto Coast to Coast” that the Fed isn’t ready to start cutting interest rates.
The closely watched inflation report due on Thursday is expected to show that price pressures within the economy continued to ease in June.
Economists expect the Consumer Price Index, which measures the prices of a range of goods including gasoline, health care, groceries and rent, to have risen 3.1% in June, down from a 3.3% increase the previous month.
Month by month, Inflation is being seen It rose 0.1% from its flat figure in May.
“Following an undoubtedly strong May CPI report, we expect the June CPI report to provide a new source of confidence,” Bank of America economists said in an analyst note.
Fed Chairman Powell says more ‘good’ data on inflation strengthens case for rate cuts
Other parts of the report are expected to point to a slowing decline in inflation. Core prices, which exclude volatile measures like food and energy, are forecast to rise 3.4% annually, unchanged from the May rate and suggesting underlying price pressures remain strong.
of Federal Reserve The target interest rate is 2%.
As policymakers try to decide when and how much to cut interest rates, central banks will be closely watching the report for evidence that inflation is finally cooling.
Fed keeps interest rates at 23-year high, expected to cut only once this year
Policy makers at their May meeting left open the possibility of a rate cut later this year, but at the same time “More confidence” They expect inflation to fall before easing policy. Most investors now expect the Fed to start cutting rates in September or November, and they expect just two cuts this year.
Inflation has put severe financial pressures on most American households, who are being forced to spend more on everyday necessities like food and rent. The burden falls disproportionately on lower-income Americans, whose already tight paychecks are hit hardest by price fluctuations.
A grocery store in Washington, DC, on February 14, 2024. (Mostafa Basim/Anadolu via Getty Images/Getty Images)
Inflation has fallen from a peak of 9.1%, but compared to January 2021, just before prices began to soar, the consumer price index was Approximately 20% increase.
Click here to get FOX Business on the go
A new survey released by LendingTree found that more households are financially insecure than they were two years ago, despite inflation rates dropping significantly from two years ago. As of April 2024, about 36.4% of Americans said they were experiencing “great” difficulty paying for regular household expenses, including food, mortgages, and home equity. Rent or mortgagecar payments, medical bills, etc.
This is 6.7% higher than in 2022.
“It’s alarming that a third of U.S. households are in a precarious financial situation,” said Matt Schultz, chief credit analyst at LendingTree, “but it shouldn’t be too surprising: A perfect storm of record debt, high interest rates and persistent inflation has shrunk many Americans’ financial cushion to virtually nothing.”
