Speaking before the Senate Banking Committee, Powell warned the central bank may have to raise interest rates even more, sending stock markets sharply lower.
Americans began the new year with a spending spree, but businesses are not sure how long it can last. There's a lot riding on the answer, since consumer spending is the backbone of the U.S. economy.
Annual inflation cooled in January for the seventh month in a row. But price increases accelerated between December and January, fueled by rising shelter, food and gasoline prices.
The markets have rallied this year as investors believe inflation will continue to ease and that the economy will avoid a recession – but it could end in tears.
U.S. employers added 517,000 jobs in January, as the unemployment rate fell to 3.4% . The job market remains tight, despite signs of a slowing economy.
The Federal Reserve raised interest rates by a quarter-percentage point as part of its ongoing effort to fight inflation. Price hikes have begun to ease, but the Fed says inflation is not yet tamed.
The U.S. economy grew at an annual rate of 2.9% in the final three months of last year — a surprisingly strong finish. But growth is expected to slow in 2023, and possibly even reverse.
Annual inflation continued to ease, cooling to 6.5% in December, but prices are still climbing at a rapid rate, meaning people have to work longer and harder to keep the same standard of living.
More Americans are leaning on their credit cards to cope with rising prices. And as interest rates continue to climb, that debt is getting more and more expensive.
Partridge prices were flat this year, but the cost of pear trees jumped more than 25%. PNC bank has run the numbers on all 12 days of Christmas, as it calculates its annual holiday price index.
Inflation may be slowing, but prices are still climbing much faster than Americans are used to. The Federal Reserve's dramatic steps to bring it to heel appear to be working - somewhat.
