WASHINGTON–Although another inflation record was set in June, two CUNA economists say it’s certain a Fed rate increase lies ahead, and also agree there is some potential good news ahead in the wake of the latest Labor Department’s June Consumer Index report.
“Prices jumped to another record high in June, coming in at 9.1% year-over-year, which was higher than the consensus expectation,” said CUNA Senior Economist Dr. Dawit Kebede. “This is driven by a broad category of items, but energy prices have contributed half of the increase since May.
“There are signs that some of the main drivers of inflation are easing, such as lower oil and other commodity prices in July, slower wage growth, and declining supply chain pressures. However, service price increases led by housing and pent-up demand for vehicles will keep inflation elevated in the coming months.
Fed Action Ahead
“There is a higher chance that the Federal Reserve will raise interest rates by 75 basis points if not more by the end of the month given a strong jobs report, broad-based price increases, and elevated inflation expectation,” Kebede continued.
The National Association of Federally-Insured Credit Unions (NAFCU) Chief Economist and Vice President of Research Curt Long issued the following statement after the latest release of the Consumer Price Index (CPI) data.
NAFCU Response
"Inflation was hotter than expected in June and accelerated even after stripping out food and energy prices. There are reasons to think price growth may be slowing in July given the recent drop in gas prices and slowing wage growth, but the Fed is focused on actual inflation data, not conjecture,” said Long. “The June data leaves no doubt that the FOMC will raise the target federal funds rate by 75 basis points later this month and even puts a 100 basis point hike on the table. While credit unions persist in delivering safe and low-cost services to families and Main Street, they should remain attentive to the Fed's inflation reactions in the months to come."
The Very Best in CU Reporting. For You. For Free. Or Your Money Back.
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.