The United States Federal Reserve raised its key interest rate Wednesday for the 11th time in 17 months. Read more.
In a statement, the Fed said the economy “has been expanding at a moderate pace,” a slight upgrade from its assessment in June. It’s a sign that it sees the economy as slightly healthier than it was just last month.
Economists at Goldman Sachs Inc. have downgraded the likelihood of recession to just 20 per cent, from 35 per cent earlier this year. Those at Deutsche Bank, among the first large banks to forecast a recession, have also been encouraged by the economy’s direction, though they still expect a downturn later this year.Article content
Year-over-year inflation in June was three per cent, according to the government, down sharply from a peak of 9.1 per cent in June 2022. One cautionary note is that an inflation measure preferred by the Fed, which excludes volatile food and energy costs, was still up 4.6 per cent in May from a year earlier.Article content
For the Fed, the drop in inflation from roughly nine per cent to three per cent was the relatively easy part, some analysts say. Getting it down to the Fed’s two per cent target will be harder and take longer.
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