The central bank recently raised interest rates for the first time since 2018.
(Photo: Reuters)
Washington According to the Federal Reserve (Fed), the US economy has recently grown at a moderate pace. Inflationary pressure is high, the US Federal Reserve said in its Beige Book economic report published on Wednesday.
Rising prices clouded growth prospects. This also applies to the uncertainty caused by recent geopolitical developments, the central bank added with a view to the Ukraine war. In the face of strong demand, companies are passing on higher costs to their customers, according to the report, which is based on business contacts from the regions.
Supply chain problems have therefore increased in several areas, in particular due to the lockdowns imposed in China in the fight against Corona. At the same time, according to the Fed, retail companies in the USA benefited from the nationwide abating of the corona crisis, as consumers were more generous again.
The US economy had grown robustly at the end of 2021 with an annualized increase in gross domestic product (GDP) of 6.9 percent. For next week’s upcoming GDP data for the first quarter, experts only expect an annualized increase of 1.0 percent.
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In view of the highest inflation in over 40 years and a labor market that is running hot, the Fed implemented the interest rate turnaround in March and intends to do more this year. Unusually large rate hikes of half a percentage point each are expected for the meetings in May and June.
More: US Federal Reserve Banker Bullard advocates an interest rate of 3.5 percent at the end of the year