High Interest Rates Will Continue To Challenge Most Sectors Of The Economy

Americans recently received positive news that the rising rate of inflation is slowing down. The Federal Reserve finally has enough data to justify increasing rates less. As I expected, the Federal Open Market Committee raised rates by 0.5 percentage points, which would be a welcome change after several 0.75 percentage-point increases earlier this year.

However, inflation is still a challenge for the Federal Reserve, since current Consumer Price Index (CPI) levels are significantly higher than the 2.1% average rate that had existed the three years before the pandemic struck. On Tuesday, the U.S. Labor Department announced that CPI rose 7.1% in November from a year ago. This is lower than 7.7% in October. Fortunately, inflation has been decreasing from the peak of 9.1% in June.