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The news arrives in a further sign that the Federal Reserve’s series of interest rate hikes are having an impact in cooling the economy, with the central bank’s benchmark rate sitting at 5.25% – its highest level for 22 years, following 11 straight increases since March 2022.
Still, inflation remains persistent in service businesses where wages account for a high share of costs, while average hourly wage growth continues to be elevated at 4.4%.
That’s likely to keep rates elevated for a prolonged period, with little sign that the Fed is eyeing a cut in the coming months.
The latest figures came as no surprise to observers, with both headline and core inflation falling in line with Wall Street expectations.
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