The FED officials say that they will succeed in getting down inflation to 2% without facing a recession


The FED officials say that they will succeed in getting down inflation to 2% without facing a recession.

NATO is willing to send thousands of its troops to eastern European territories to prevent any escalation by Russia. It’s been more than three months since the start of the war, and the Ukrainian troops are showing signs of victory. As for the U.S. position on the war, President Biden has pledged to provide any necessary aid. The U.S. and its allies are working non-stop to find alternative solutions, economically and politically, to help end the war as soon as possible. The United States has approved $820 million in military aid for Ukraine to help it avoid defeat at the hands of Russian troops. That includes sending two national advanced surface-to-air missile systems.

We are aware of the war’s effects on the global economy, the food and energy prices are increasing at a rate never seen over the past 40 years. The global economic central banks will increase their interest rates aggressively, and that would affect the cost of borrowing and the housing market in general.

Experts believe that inflationary pressures are increasing by the day and that raising interest rates aggressively now may be too late. The global indexes are heading into a bear market. The Wall Street index has posted one of its biggest monthly and half-losses in 2022.

Plus, the Atlanta FED GDP believes that the 2022 first half will decline by 3.7%. According to the bank, the first quarter declined by 1.6% and the Atlanta FED GDP forecast a negative 2.1% by the end of the second quarter.

Yet, the Wall Street indexes ended today’s session with positive gains. According to the Wall Street Journal, the S&P gained 40 basis points on Friday. The tech-heavy Nasdaq rose by 99 basis points and the Dow 30 jumped by 322 points.

Heading inflation remains low, and consumer spending increased but fell short of expectations. Further surveys indicate that U.S. consumers are losing faith in the government’s ability to tame the fast increases in food and energy prices since 1982.

Some Federal Reserve officials have some optimism about the economy’s health. Some officials believe that a recession is a long shot. Yet, it will take more than a few words to make consumers feel safer.

Is the Federal Reserve up to the task?

In his latest interviews, the Federal Reserve chairman says that his department has all the tools and their focus is on taming inflation and drawing its rate to 2%. These comments have raised some eyebrows among CEOs, traders, and exporters because taming 6.8% inflation and dropping it to 2% means more aggressive interest hikes. Another factor to consider is the labor force. It is difficult to keep up with additional costs and fight inflation when many factories are letting go.

The weekly job claims have increased in the past two weeks.

Factories and other industries can’t keep up with the increasing costs, which forced them to decrease their labor force.

Written by Editor

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