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Moody癒礎s: Rising Inflation Expectations May Force Fed to Hike Rates
2026-06-05 14:35:23 The US economy may be growing, but that does not mean it is in a healthy state, as growth remains below its potential level, Moody’s Chief Economist Mark Zandi said. Unless growth accelerates, the unemployment rate will rise and labor force participation will decline, ultimately undermining economic expansion. He added that a weak labor market is suppressing wage growth. As inflation accelerates, real wage growth has nearly stalled. More concerning, however, is that the Federal Reserve may be unable to cut interest rates to stimulate the economy and support job growth. Tariffs and the Iran war have pushed the inflation rate close to 4%. If inflation expectations continue to rise, the Federal Reserve may raise interest rates even if it results in a full-scale recession. ~ AASTOCKS Financial News Website: www.aastocks.com | |