Despite more than a year of widespread warnings that a recession was near, America’s economy is, if anything, accelerating.The Fed has already hiked its main interest rate to the highest level in two decades, and it has said it will make upcoming moves based on how inflation and other parts of the economy perform. Inflation has come down from last year’s peak above 9%, but economists warn the last bit of improvement to get to the Fed’s target could be the most difficult to achieve.
With Fed officials no longer giving speeches ahead of their meeting next week on interest rates, “the data will do all of the talking this week,” economists at Deutsche Bank said in a report. They say a report on Thursday about inflation at the wholesale level will be nearly as important as the data on inflation at the consumer level. High growth for wages in the healthcare industry could be pushing inflation up there, they say.
A separate report on Thursday will also show how much U.S. households spent at retailers last month. Strong spending there recently has helped the economy to avoid a long-predicted recession. But it also could be adding pressure on inflation by encouraging companies to keep trying to raise pricesYields were holding relatively steady on Monday, with the 10-year Treasury yield up to 4.28% from 4.26% late Friday.
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