The quest to rein in inflation continues as the Fed raised rates for a sixth consecutive time at November’s meeting.
However, the Fed’s task to orchestrate a soft landing has become increasingly difficult. Trends in other economic indicators are beginning to emerge that suggest a recession is on the horizon. But if the stubborn inflation figure doesn’t show a marked reversal of course soon, Fed rhetoric and policy may need to lean more dovish to allow prices a chance to catch up.
Following back-to-back quarters of negative growth, real GDP increased at an annualized rate of 2.5% in the third quarter of 2022, largely due to smaller increases in private inventory investment, an acceleration in nonresidential fixed investment, and an upturn in federal government spending.
