Surprisingly durable US economy poses key question: Are we facing higher-for-longer interest rates?
A year ago, Chair Jerome Powell warned that to fight high inflation, the Federal Reserve would continue to sharply raise interest rates, bringing “some pain” in the form of job losses and weaker economic growth
By CHRISTOPHER RUGABER
Published - Aug 23, 2023, 05:03 AM ET
Last Updated - Aug 23, 2023, 05:03 AM EDT
WASHINGTON (AP) — A year ago, Chair Jerome Powell delivered a stark warning: To fight persistently high inflation, the Federal Reserve would continue to sharply raise interest rates, bringing “some pain” in the form of job losses and weaker economic growth.
Yet so far, broadly speaking, not much pain has arrived.
Instead, the economy has powered ahead. Hiring has remained healthy, confounding legions of economists who had forecast that the spike in rates would cause widespread layoffs and a recession. The unemployment rate is near a half-century low. Consumer spending keeps growing at a healthy rate.
