The economy continues to roll, jobs are plenty and consumers are getting a bit more upbeat. That’s bad news for interest-rate-cut bets.
by Martin Baccardax
The Street
The U.S. economy continues to defy both calls for a slowdown and suggestions that a recession is on the horizon, as a resilient job market and solid consumer spending continue to power stronger-than-expected growth prospects.
The surprising strength, however, has deepened concerns that the Federal Reserve, which is focused on stubborn inflation pressures, will delay any move to lower borrowing costs over the coming months and could scrap rate cuts altogether until early next year.
Minutes from the central bank’s May policy meeting, published last week, noted a willingness to “tighten policy further should risks to inflation materialize.” But the document otherwise suggested a “wait-and-see” preference to determine any near-term interest-rate moves.