The Fed's favorite inflation gauge climbs 6.6% from a year earlier

Demand remained strong and supply chain disruptions continued into 2022, making the central bank’s job all the more difficult. The Fed h...


Demand remained strong and supply chain disruptions continued into 2022, making the central bank’s job all the more difficult. The Fed has in the past caused recessions while trying to curb high inflation. Now the authorities are limiting the economy just as the war in Ukraine is increasing uncertainty and threatening to keep gas and other commodity prices high.

“It will be another extremely long and difficult year,” Diane Swonk, chief economist at Grant Thornton, wrote in a research note on Friday after the inflation and wages release. “Tie yourself down.

The outlook for inflation in the coming months is extremely uncertain. On the one hand, the Fed’s pivot on interest rates has pushed mortgage rates sharply higher, which may begin to weigh on the housing market and cool related demand patterns. Already, some companies — such as washing machine maker Whirlpool — are see consumer demand decreased from last year, although high from pre-pandemic levels.

But the costs of key inputs continue to climb, and that could remain the case amid the war in Ukraine and as China locks down key cities to contain the coronavirus. At Whirlpool, higher input prices incentivize the company to charge consumers more.

“Historic levels of inflation, particularly in commodities, energy and logistics, will impact us throughout the year,” James W. Peters, the company’s chief financial officer, said Tuesday at a press conference. a conference call. “However, our previously announced pricing actions are on track and position us to fully offset cost inflation at the end of the year.”

Many products were already struggling to return to normal inventory levels before Russia invaded Ukraine and disrupted commodity markets. Cars and trucks, for example, have remained in short supply due to shortages of critical parts – the most critical being semiconductors. Ford executives said this week that the company had built 53,000 vehicles but were waiting for chips to complete them.

“Customer demand is extremely strong,” Ford CEO Jim Farley said in a statement. April 27 call for results. “However, we are still struggling with ongoing supply chain issues that are preventing us from posting an even stronger quarter.”

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Newsrust - US Top News: The Fed's favorite inflation gauge climbs 6.6% from a year earlier
The Fed's favorite inflation gauge climbs 6.6% from a year earlier
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