Washington According to the Federal Reserve (Fed), the US economy continued to grow at a moderate to moderate pace. However, rising prices and higher interest rates are already making themselves felt, according to the US Federal Reserve in its “Beige Book” economic report published on Wednesday.
In the economic report, which is based on economic contacts from the regions, the Fed also pointed out that growth in production had continued despite disruptions in the supply chains. Russia’s invasion of Ukraine, high inflation and failures due to Corona would have affected companies’ plans.
In most districts, growth expectations are therefore clouded. In some regions, fears of a recession were even voiced.
The US economy contracted an annualized 1.5 percent in the first quarter. However, as Fed Board member Christopher Waller recently said in Frankfurt, such a downturn is unlikely to be repeated in the second quarter.
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In view of an inflation rate of 8.3 percent recently, the central bank took the largest interest rate hike in 22 years at the beginning of May and raised the key interest rate by half a point to the new range of 0.75 to 1.0 percent.
Powell would accept subdued growth
Fed President Jerome Powell has signaled hikes of the same magnitude for the June and July meetings. In the fight against escalating inflation, he also wants to accept that growth will be dampened by the tightening of monetary policy. At the same time, he was confident that the Fed would achieve “a kind of soft landing” for the economy.
According to San Francisco Fed District Chair Mary Daly, there is no sign of a recession. On the contrary, growth is currently strong, she told CNBC.
More: Biden after meeting with Fed Chair Powell: “I will not interfere in your important work”