Federal Reserve's interest rate hikes may take longer to reduce inflation due to limited impact on consumer spending.
Federal Reserve officials suggest that their recent interest rate hikes may take longer than expected to reduce inflation, as higher borrowing costs are not substantially impacting consumer spending. Despite the Fed's rate hikes, Americans are not spending more of their incomes on interest payments than they did a few years ago, indicating that higher rates may not be effectively limiting spending or cooling inflation.
May 13, 2024
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