Minutes from Federal Reserve’s July policy meeting were released Wednesday
Fed officials saw ‘little evidence’ that inflation pressures were easing
Policymakers said that they saw inflation remaining elevated for ‘some time’
Notes signaled that they are prepared to slow the economy to control inflation
Federal Reserve officials saw ‘little evidence’ late last month that US inflation is easing and predicted it would remain elevated for ‘some time’, newly released minutes from July’s policy meeting show.
The minutes released on Wednesday showed policymakers committed to raising rates as high as necessary to bring inflation under control, and acknowledging that they would have accept lower economic growth for that to happen.
Inflation has been running hot and remained near a 40-year high at 8.5 percent in July, despite a rapid series of jumbo interest hikes that have taken the Fed’s policy rate from near zero to 2.5 percent.
The minutes from the July 26 to 27 policy meeting did not hint at a particular pace of future interest rate increases for future meetings, including the next one scheduled for late September.
Inflation has become such a problem that high-income-class Americans have begun opting for shopping items at destinations like Walmart.
Walmart’s reputation as a discounter is attracting more upper- and middle-class consumers to its stores, said John David Rainey, the company’s chief financial officer, in a recent interview with CNBC. Budget-strapped consumers are “trading down” in terms of quantity and quality purchases. For instance, they are buying items like beans and canned tuna rather than beef or deli meats. “Clearly, they’re stressed from higher gas prices, higher food prices, and even housing,” he said.
Some shoppers are increasingly using credit more than debit to buy items, Rainey stated. Roughly three-quarters of the company’s market-share gains in food during the fiscal second quarter came from consumers who have annual household incomes of $100,000 and more, the CFO pointed out.
Sen. Joe Manchin (D-WV) admitted on Tuesday that the Inflation Reduction Act would not “immediately” reduce inflation.
The $740 billion piece of legislation, signed this week by President Joe Biden, was made possible by a deal between Manchin and Senate Majority Leader Chuck Schumer (D-NY). When asked by Fox News reporter Hillary Vaughn whether the title of the law is misleading given its lack of effect on the price of staple goods, Manchin replied, “Why would it?”
“Well, immediately it’s not,” Manchin added. “We’ve never [said] anything would happen immediately, like turn the switch on and off.”