FILE - Shoppers consider appliances on display in a Costco warehouse March 6, 2024, in Sheridan, Colo. But experts say it’s not time yet for Americans squeezed by high prices and high borrowing costs to exhale.“Rate cuts are not coming anytime soon,” he said Friday. “Buckle down. Inflation is here. Rates are going to be high. Cut spending. Pay down debt.”The Fed doesn’t set the interest rates consumers are most familiar with, such as those for homes and cars.
Weiler said the sweet spot for GDP would be between 2 and 3% growth. But the slower growth isn’t bad as a “signal to the policymakers” who are looking for reasons to cut interest rates.There’s “no real turbulence” in the economy, Weiler said. And the Fed wants to see a longer trend of slower growth and inflation before taking action.
And so-called core PCE, which strips away volatile food and energy costs, is even better in the Fed’s eyes.Core PCE rose 0.2% from March to April, the lowest month-to-month increase of the year.Though small, Weiler said the PCE was “shaving its growth,” and that’s “a good sign.”“The data shows no signs of mission accomplished,” Papadimitriou warned.