The Fed reports a modest increase in US economic indicators
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The US economy slowed down significantly in 2022, and economic activity is growing at a modest pace this year. About it declared Jerome Powell, Chairman of the Board of Governors of the US Federal Reserve, delivering a report to the House of Representatives.
“The US economy has slowed significantly in the past year, and recent indicators suggest that economic activity continues to grow at a modest pace,” he said.
The Fed notes an acceleration in consumer spending growth, but it is accompanied by weak activity in the housing sector due to high mortgage rates and a “very tight” situation in the labor market.
U.S. inflation has slowed somewhat since last year, but inflationary pressures remain high and there is “a long way to go” to hit the 2% target, Powell added. The official assessed the state of the country’s banking system as stable. The regulator, he said, is seeking to eliminate its vulnerabilities that led to the collapse of several US banks in the spring.
June 14 Fed kept base rate at the level of 5-5.25% per annum. The regulator noted the growth of economic activity at a “moderate pace”. Unemployment remains low, while inflation is still elevated. Inflation in the United States in June slowed to 4% in annual terms from 4.9% a month earlier, which was the lowest since May 2021.
Earlier this month, Goldman Sachs CEO David Solomon declared journalists that even in the case of a small increase in US GDP, it will seem that the recession has already begun. At the same time, the banker considered the scenario in which this would not happen against the backdrop of strong consumer demand and low unemployment to be very likely. The US economy turned out to be generally much stronger than expected, he stressed.
A number of leading Wall Street analysts, including billionaire investor Jeremy Grantham and Morgan Stanley’s chief US equities strategist Mike Wilson, had previously warned of an impending recession and a potential fall in the stock market in the coming months, Vedomosti wrote.
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