We Need Consumer Prices To Come Down – And Stay Down – For The Fed To Pivot

Stéphane Renevier

4 months ago1:08 min

We Need Consumer Prices To Come Down – And Stay Down – For The Fed To Pivot

If the Federal Reserve (the Fed) is ever going to think about tapping the brakes on its aggressive interest rate hikes, it’ll need to see some pretty hefty drops in consumer prices first.

That much is clear from the projections above. If consumer prices continue to rise in roughly the range we’ve seen in the past year (generally increases between 0.5% and 1% from the month before), inflation is expected to be between 8.8% – just inches from its current 9.1% – and an eye-watering 11.7%. And even in the more likely scenario where prices rise as little as 0.3%, inflation will still come in at 5.9%. For inflation to fall significantly, prices would have to stop rising altogether.

July’s consumer price data is out on Wednesday, and investors are expecting prices to be just 0.2% higher in

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