The Fed released the Beige Book today, a report in which he overturns the prospects for economic activity, prices and the labor market of the twelve regions of the country.
The document indicated that “in general, businessmen expected little growth in the coming months. Consumer spending increased slightly, with some retailers reporting stronger sales during the holidays. Other retailers noted that high inflation continued to reduce the purchasing power of consumers, particularly among low- and moderate-income households.”
Yesterday the price of crude oil was boosted by the possibility of an increase in world demand, especially from China, which recently released some better-than-expected economic data and has opened its borders after its harsh restrictions due to the pandemic.
However, both OPEC and the International Energy Agency do not foresee significant jumps in demand.
However, the reopening of China has also brought a resurgence of virus cases, so there are now concerns about how activity in the country will evolve.
Another reason for uncertainty for investors is that the rise in interest rates by the Fed could translate into a recession.
St. Louis Fed President James Bullard said that despite the cooling of inflation, the central bank should keep raising interest rates rapidly until they are above 5% to prevent inflationary pressures from returning.
Source: Ambito
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