Americans Credit the Fed for Inflation Cooldown in Consumer Survey - BNN Bloomberg
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Jonnelle Marte, a reporter at Bloomberg News
, Based on data from a survey conducted by the New York Federal Reserve Bank of people's expectations as consumers
According to the latest Bloomberg report, Americans believe that the Federal Reserve might be ready to celebrate their success soon.
A recent survey conducted by the New York Fed revealed that the majority of American consumers believe that the actions taken by the Federal Reserve, combined with enhancements in supply-chain problems, are the primary reasons behind the decrease in inflation over the past year. Moreover, these factors are also identified as the top influencers that could cause the inflation rate to further decline in the upcoming year.
When questioned about the causes of rising inflation from 2019 to 2022, the majority of participants attributed it to difficulties in the supply chain. These difficulties included the scarcity of products, closures due to the Covid-19 pandemic, and a shortage of workforce, all of which were identified as the main contributors to the increase in prices.
According to a recent blog post by researchers at the New York Fed, it appears that customers perceive that supply chain problems, initially worsening and then gradually improving, have played a significant role in the noticeable price increases observed in the US economy since 2020.
The rate of inflation for consumer prices has significantly decreased over the past year and is currently around one-third of the level it reached in June 2022, when price increases reached their highest point in four decades. Surprisingly, consumer expectations of inflation, as measured by the University of Michigan, also dropped in early August, even though gasoline and grocery prices were higher.
The prospects are looking good for the US central bank, which raised its main rate in July to a desired range of 5.25% to 5.5%, reaching the highest point in 22 years. This action was taken to reduce demand and alleviate pricing strains. However, since inflation remains higher than the Federal Reserve's goal of 2%, policymakers are not yet willing to completely dismiss the possibility of additional interest rate hikes.
Records from the Federal Reserve's meeting in July revealed that officials still had worries about inflation not going down and believed that more interest-rate hikes would be necessary. However, there were also signs of disagreement within this agreement, as two Fed officials expressed their potential support for keeping rates unchanged.
Additional Information: Federal Reserve Officials Change Discussion About Interest Rates from 'What Height' to 'What Duration'
Important economic information released since the July meeting has mainly reinforced the idea that Federal Reserve officials will have a period to carefully consider whether further tightening is necessary.
A large number of decision-makers are expected to convene during the upcoming week at the Kansas City Fed's yearly Jackson Hole conference in Wyoming. Furthermore, the next meeting to discuss policies is scheduled to take place on September 19th and 20th.
