The headline inflation growth rate has seen a recent cooling off period, with an annualized rate of 1.4% for May. This data has observers questioning the potential impact on Federal Reserve policy.
Inflation has been slowly rising in the months since the start of 2021, leading some to expect higher rates for the remainder of the year. But the recent cooling off period has made this uncertain. While the Fed targets an inflation rate of around 2%, whether this rate will be achieved is now in question.
If inflation lulls, this could result in the Fed pivoting and introducing measures to lower rates. This could provide borrowers with an opportunity for relief. The data should continue to be monitored as the year progresses, so any changes in Fed policy can be better gauged.
Main Points:
• Headline inflation growth rate has cooled off to 1.4% in May
• Fed’s target inflation rate is 2%, but whether this will be achieved is now uncertain
• If inflation lulls, there could be an opportunity for borrowers to benefit from Fed’s measures to lower rates
• Data should be monitored to gauge any changes in Fed policy
You can read this full article at: https://www.housingwire.com/articles/has-the-fed-won-its-battle-against-inflation/(subscription required)
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