US economy in recovery mode

There are clear signs that inflation is easing across the country but the Federal Reserve says it will continue to raise interest rates until it hits a target of 2%

Is inflation in the US slowing down?

The lastest reports released by the US government showed that consumer prices did not rise icompared to the previous month.

But the inflation rate is still a lot higher than the Fed’s goal.

Minneapolis Federal Reserve Bank President Neel Kashkari, said that the consumer price index report was “welcome” news, but the Fed is “far, far away from declaring victory” on inflation.

Kashkari also said that he hasn’t found a reason for the Fed to increase its policy rate to 3.9% by the end of the year and to 4.4% by the end of 2023.

The rate is currently in the 2.25% to 2.5% range.

The dollar also fell broadly following the U.S. inflation report for July.

And despite Kashkari’s statement, many are still wondering whether the latest figures will be enough to stop the Federal Reserve from an aggressive interest rate hike.  

These developments were welcomed by consumers,

In particular good news came as the average price of US retail gasoline fell below $4 dollars per gallon for the first time in months.

According to Reuters, many economists believe, less policy tightening would be enough to bring prices under better control.

Nonetheless, there are clear signs the economy is improving and this has provided relief for the wider public.