Your Money
To say a lot of data hit the Street last week would be an understatement.
- First, the Federal Reserve (the Fed) raised its benchmark federal funds rate to a range between 5.25% and 5.5%, its highest level in over 22 years.
- Then, the official GDP report showed that the U.S. economy grew at a 2.4% annual rate in the second quarter. This figure exceeded expectations as the American consumers' spending kept the recovery on track.
- Lastly, the personal consumption expenditures (PCE) price index, a key Fed inflation measure, fell to its lowest rate in two years.
The U.S. economy appears to be steadily cooling while averting a recession thanks to the resilient labor market. Although parts of the economy are still cooling, as the Fed wants, fresh economic data reinforced optimism that inflation can fall without a recession.
That said, the economy is not the stock market, and readers of this newsletter are investors, not economists...but more on that topic next week. In the meantime, you can enjoy this article about the soft landing scenario.
How the U.S. Economy Is Sticking the Soft Landing
by Ruth Simon and Sarah Chaney Cambon
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