Further, on June 23, Governor Michelle W. Bowman spoke at an Executive officers conference of the Bankers Association on the outlook for inflation and monetary policy. She summed up the macroeconomic crisis the world is facing with inflation, rising prices of goods, and the effects the war in Ukraine is having on the world. The Governor added:
Long term consequences
Consumers more often than not take into consideration future inflation possibilities before deciding to spend their hard-earned money. Near-term worries around inflation are tied to the current inflationary pressures; however, a rise in long-term inflation expectations can signal a lack of confidence in the Fed to solve the inflationary challenges. In the short-term, one positive development is that the labor market seems to be stronger than expected, with the U.S. economy adding jobs at a pace of 400,000 per month in the past three months. Meanwhile, wages have not kept pace with inflation, which is reflected in the lower spending power of the consumers, especially in the housing sector, which is softening and ability to buy energy. Finally, the joint approach by the bankers, the Fed, and the government of the U.S. could yield positive results to taper inflation and the pressures it creates. Similarly, short-term volatility in the energy markets will likely continue until more concrete steps have been taken and until inflation starts to markedly move lower. Buy stocks now with Interactive Broker – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
