The US Federal Reserve is facing an inflation rate of 8.3 percent.
(Photo: dpa)
Washington At the beginning of the year, the US economy contracted somewhat more than initially assumed. Gross domestic product (GDP) fell an annualized 1.5 percent in the first quarter, the Commerce Department said on Thursday, based on a second estimate. Initially, there was talk of a minus of 1.4 percent. Analysts had expected a slight improvement to minus 1.3 percent.
The sagging economy comes at a time of rapidly rising prices. The US Federal Reserve is facing an inflation rate of 8.3 percent. Against this background, it recently took the largest interest rate step in 22 years – an increase of half a percentage point to the new interest rate range of 0.75 to 1.00 percent. More increases are likely to follow soon.
US Federal Reserve Chairman Jerome Powell recently emphasized that in the fight against inflation one must also accept that economic growth will be lower. He is striving to achieve a “soft landing” – that is, the smoothest possible transition to slower economic growth that does not result in a recession with higher interest rates.
More: Fed minutes point to sharp rate hikes in summer
Top jobs of the day
Find the best jobs now and
be notified by email.