The U.S. grew steadily through early April, a Federal Reserve survey found, but high inflation showed little sign of relenting in “the coming months” and clouded the outlook for the economy.
The regular Fed survey, known as the Beige Book, found little evidence inflation is set to turn sharply lower. Businesses have been forced to pay higher wages due to a tight labor market, supply-chain bottlenecks persist and prices continued to rise.
The war in Ukraine added to inflationary pressures by raising the cost of oil, metals and grains such as wheat, the Fed noted. Fresh coronavirus outbreaks in China also “worsened supply chain disruptions.”
“Firms in most Districts expected inflationary pressures to continue over the coming months,” the Beige Book said.
The cost of living in the 12 months ended in February rose to a 40-year high of 8.5%, forcing the Fed to start to raise interest rates for the first time since 2018.
It’s “premature,” Daly said, to judge how far rates will ultimately need to rise. As the Fed raises rates, she said she’ll be assessing the economic impact of tighter U.S. monetary policy, Russia’s war in Ukraine and the state of supply chains.
Thursday 21st April – High Impact Events
Times are GMT+3
15.30 – US – Philly Fed Manufacturing Index & Unemployment Claims
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