Fed on the US economy: Economic outlook darkens
Washington According to the Federal Reserve (Fed), the US economy has recently grown slightly overall. However, conditions varied across industries and districts, the US Federal Reserve said in its Beige Book economic report released on Wednesday. In some regions there was a standstill, in others even a decline.
According to the report, which is based on business contacts from the regions, the outlook has darkened. Respondents were increasingly worried because demand was falling. Overall, price pressure remained high, but there was a slight decline in a number of districts.
The US economy went into reverse gear in the first half of the year as a result of the energy crisis and the ongoing supply bottlenecks. Experts surveyed by Reuters expect the next week’s figures on gross domestic product in the third quarter to return to growth: they expect an annualized increase of 2.0 percent after a 0.6 percent decline in the spring.
At the same time, the Fed is confronted with a high inflation rate of 8.2 percent recently. It has been driving up the key interest rate in large steps for months in order to curb inflation.
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This has raised concerns in the markets that overly aggressive monetary policy could stall the economy. The key interest rate is currently in a range of 3.00 to 3.25 percent. Another jumbo hike by the Fed of 0.75 percentage points is likely to follow in early November.
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