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Plummeting Inflation Raises New Risk for Fed: Rising Real Interest Rates.
- Source :
-
Wall Street Journal - Online Edition . 1/29/2024, pN.PAG-N.PAG. 1p. - Publication Year :
- 2024
-
Abstract
- The Federal Reserve is facing a dilemma as inflation has fallen faster than expected. If inflation has truly returned to the Fed's target of 2%, then real interest rates have risen and could be restricting economic activity. The Fed is considering cutting interest rates, but wants to ensure that the lower inflation can be sustained before taking action. Some experts believe that waiting to cut rates could be risky, as heavily indebted companies may struggle with higher rates. Others argue that the economy can tolerate higher rates and that lower inflation will boost consumer confidence and spending. The Fed is also concerned about maintaining its credibility and avoiding damage to the labor market. [Extracted from the article]
Details
- Language :
- English
- Database :
- Academic Search Index
- Journal :
- Wall Street Journal - Online Edition
- Publication Type :
- News
- Accession number :
- 175048825