Lates News

Economists say that the mixed employment report for July released last week has raised the importance of inflation data. Jeffrey Roach, chief economist at LPL Financial, stated that the path of Federal Reserve interest rate hikes will depend on how long inflation remains elevated. As the labor market slows, inflation may become a key swing factor for the Fed. A more uncertain inflation outlook could support a rate hike once this year, but it is unlikely to raise rates further. Vanguard analyst Hicklin noted that the July employment report, along with his anticipated improvement in inflation, would bolster the Fed's justification for holding steady through the end of the year. It is expected that the Fed's focus is beginning to shift towards balancing labor market and inflation data, whereas inflation was the top priority just six weeks ago. Given the recent data releases, confidence in the Fed maintaining rates this year has further strengthened.