The International Monetary Fund says the U.S. economy won’t escape the challenge of persistent inflation if the job market does not soften and monetary policy does not stay tight for an extended period of time. On Friday, the U.S. Bureau of Economic Analysis (BEA) revealed another hotter-than-expected price consumption expenditure (PCE) inflation reading, cementing market expectations for an interest rate hike in June or July.
“The strength in demand and labor market outcomes is a double-edged sword, contributing to more persistent inflation,” the IMF Article IV mission statement read. The IMF added that core and headline PCE inflation will continue to stay over the Fed’s 2% target during 2023 and 2024.
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