A measure of prices that is closely tracked by the Federal Reserve rose 5.8% last year, the sharpest increase since 1982, as brisk consumer spending collided with snarled supply chains to raise the costs of food, furniture, appliances and other goods.
U.S. economic activity "downshifted" in July and August due to rising concerns about COVID's delta variant, as well as supply chain problems and labor shortages, the Federal Reserve's latest survey of the nation's business conditions revealed.
The Federal Reserve foresees the economy accelerating quickly this year yet still expects to keep its benchmark interest rate pinned near zero through 2023, despite concerns in financial markets about potentially higher inflation.
The Federal Reserve took note of the U.S.'s resilient economy on Wednesday by raising the country's benchmark interest rate for the second time this year and signaling that it may accelerate its pace of rate increases.
The Federal Reserve is all but sure to leave interest rates unchanged this week, although steady economic growth and inflationary pressures are likely to keep the Fed on a path toward further rate hikes later this year.
Federal Reserve Chair Janet Yellen told Congress on Wednesday that the Fed is carefully watching a recent slowdown in inflation and that, if it persists, it could lead the central bank to rethink its plans on rate hikes.