The US economy appears to be in a state of flux, with interest rates expected to remain elevated and consumers facing higher prices due to tariffs. On Thursday, economic data revealed a mixed bag, with the producer price index (PPI) surprising Wall Street by falling 0.5% in April.
However, despite this downward trend, Federal Reserve Chair Jerome Powell expressed skepticism about lowering interest rates, citing potential supply shocks, volatile inflation, and higher rates. “We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks,” he said.
While some experts believe the benign PPI reading could be a temporary reprieve, core wholesale goods prices rose 0.4%, excluding food and energy. Major retailers like Walmart, Mattel, and Conagra Brands plan to raise prices due to tariffs. Amazon CEO Andy Jassy also stated that his company has temporarily kept prices low by buying extra inventory, but expects prices to rise once the stock is depleted.
Overall, the US economy seems to be navigating a period of uncertainty, with elevated interest rates and higher prices expected to persist in the coming months.
Source: https://www.scotsmanguide.com/news/is-this-the-calm-before-the-trade-war-storm