Планується, що міст стане частиною транспортного сполучення Києва з Кишиневом
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Japan is due to start releasing wastewater used to cool the crippled reactors at the Fukushima nuclear plant as soon as the end of August. China has criticized the planned release and imposed restrictions on Japanese seafood — prompting accusations of hypocrisy, as Henry Ridgwell reports from Tokyo.
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Over the past year, inflation in the United States has tumbled from 9% all the way to 3%, softening most of the price pressures that have gripped the nation for more than two years.  

Now comes the hard part.  

Squeezing out the last bit of excess inflation and reducing it to the Federal Reserve’s 2% target rate is expected to be a much harder and slower grind.  

A measure called “core” inflation, which excludes volatile food and energy prices, is even higher than overall inflation. It, too, seems likely to slow only gradually. The Fed pays particular attention to core prices as a signal of where inflation might be headed. In June, core prices were up 4.1% from a year earlier, according to the Fed’s preferred gauge.  

“We see some challenges in getting that all the way back to 2% quickly,” said Michael Hanson, senior global economist at J.P. Morgan.  

The stickiness of inflation could endanger the possibility that the Fed will achieve a rare “soft landing” — a scenario in which it manages to slow inflation down to its target level through higher interest rates without derailing the economy. If inflation were to remain elevated for too long, the Fed might feel compelled to further raise its key rate from its current 5.4%, a 22-year high. Most economists say they think the central bank is done hiking, but only if inflation continues to cool.  

At the same time, the Fed has acknowledged that inflation pressures have eased significantly over the past year. Encouragingly, that slowdown has occurred even while the economy has continued to expand and employers have steadily hired at a healthy pace.  

On Thursday, when the government will issue inflation data for July, economists expect it to show a slight pickup in year-over-year inflation to 3.3%. It would be the first such increase after 12 months of declines.

In part, any rebound in annual inflation for July will reflect higher gas prices. Unless they ease, gas prices could keep overall inflation above 3% through the end of the year. The national average pump price has jumped about 30 cents, to $3.83, in the past month, partly because the cost of oil has risen.  

One obstacle in bringing inflation down to the Fed’s 2% target is that the price slowdown so far has reflected mainly relatively painless changes not likely to be repeated. Until last month, for example, gas prices had already plunged from a peak national average of $5. And supply-chain snarls that had swollen the prices of cars, furniture, appliances and other physical goods have mostly unwound. The cost of long-lasing manufactured goods actually declined slightly in June from a year ago.  

Another factor is that prices had soared in the first half of 2022 before slowing in the second half. So any increase in July would have the effect of boosting the year-over-year inflation rate.  

What’s now sending prices up is mostly the cost of services — everything from dental care and auto insurance to restaurant meals and summer concerts. Those costs mostly reflect healthy wage gains for workers, which are often passed on to customers in the form of higher prices.  

“Energy prices are off, commodity prices off, core goods fell,” said Kristin Forbes, an economist at MIT and a former member of the Bank of England’s interest-rate setting committee. “That’s the quick, easy stuff. What’s left is this underlying wage-service inflation. And that’s the part that’s harder to slow down and will take take longer.”  

Many employees, especially in the economy’s service sector, could push for further raises in the coming months. With labor shortages still a problem for service industries, workers have leverage to demand higher pay. For most Americans, pay gains have trailed inflation over the past two years.  

Higher pay is one key issue driving strikes among Hollywood writers and actors. It was also a focus of the Teamsters union in its negotiations with UPS, which led to large pay gains. The United Auto Workers is also pushing for robust raises in its talks with U.S. automakers.  

Hanson, of J.P. Morgan, notes that measures of health insurance costs will start to rise this fall because of quirks in how the government measures them. And auto insurance and repair costs have been surging. A key reason is that vehicle prices soared after parts shortages developed when the pandemic erupted; costlier cars are more expensive to fix and insure. Auto insurance prices have soared nearly 17% in the past year.  

As a result, economists generally expect core prices, under the Fed’s preferred measure, to still rise at a 3.5% annual pace by year’s end — far above its 2% target. The Fed’s latest forecasts show that its policymakers expect core inflation to still be 2.6% at the end of 2024.  

Still, there are some hopeful signs that hiring and wages are slowing, which would cool inflation over time. On Friday, the government reported that employers added 187,000 jobs in July, a solid total but still reflective of a slowdown: Job growth over the past three months has averaged only about half the pace of the same period in 2022. And wage growth slipped to 4.6% in the April-June quarter, the government said, the slowest pace in a year and a half.

“That trajectory tells us where things will go in the next 12 months,” said Skanda Amarnath, executive director of Employ America, an advocacy group.  

At his most recent news conference, Fed Chair Jerome Powell sounded some cautious but hopeful notes about the prospect of a soft landing.  

“I wouldn’t use the term optimism about this yet,” he said. “I would say though that there’s a pathway….We’ve seen so far the beginnings of disinflation without any real costs in the labor market. And that’s a really good thing.”  

Yet a defining characteristic of the post-pandemic economy has been resilience, with consumers in particular showing a surprisingly persistent willingness to spend. Some economists worry that it will take a sharp rise in unemployment to reverse that trend and finally conquer inflation.  

The Fed has already been coming under some criticism for sharply raising rates and potentially putting the job market at risk. Sen. Elizabeth Warren, a Massachusetts Democrat, wrote Powell before the Fed met last month and urged him to forgo another rate increase. The central bank, though, went ahead with its 11th rate hike since March 2022.  

“The Fed’s aggressive rate hikes disproportionately threaten Black workers and their families and risk fully reversing the extraordinary labor market gains we have seen,” Warren, a frequent Fed critic, wrote.  

With political pressure on the Fed rising, Powell and other officials may soon see the precipitous drop in inflation in the first half of this year as having been the easy part.  

“The Fed has got lucky so far in what it’s gotten,” said Steven Blitz, chief U.S. economist at GlobalData TS Lombard. “Most of the decline in inflation was going to happen anyway. They really own the part that’s to come.”
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The contours of the debate at the heart of the Federal Reserve’s policy decision next month came into clearer view on Monday as officials outlined the case for and against another interest rate hike.

“The debate is really about: Do we need to do another rate increase? Or not? … I think we’re pretty close to what a peak rate would be,” New York Fed President John Williams said in an interview with the New York Times in which he voiced some confidence that underlying inflation was on a downward path.

“I do think that we are moving to an environment already where the underlying inflation rate has come down quite a bit,” Williams said in the interview, conducted August 2 and released on Monday. Williams, the vice chair and a permanent voting member of the policy-setting Federal Open Market Committee, said that inflation measures developed by the New York Fed suggest the pace of price increases could slow to as little as 2.5% annually by the end of the year, within striking distance of the Fed’s 2% target.

In separate remarks to a “Fed Listens” community event in Atlanta, Fed Governor Michelle Bowman said the combination of still-elevated inflation and continued economic growth meant further rate increases are likely. 

“I supported raising the federal funds rate at our July meeting, and I expect that additional increases will likely be needed to lower inflation to the [Federal Open Market Committee’s] goal,” she said, referring to the central bank’s benchmark overnight interest rate, which is currently set in the 5.25%-5.50% range.

“I will be looking for evidence that inflation is on a consistent and meaningful downward path as I consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level,” Bowman said.

The Fed’s preferred headline measure of inflation, the personal consumption expenditures price index, was at 3% on an annual basis as of June, while the same measure stripped of volatile food and energy prices was at 4.1% and has shown slower progress in recent months back to the Fed’s target.

The Fed raised rates by a quarter of a percentage point at the end of its July 25-26 meeting, and the most recent projections by policymakers show most expect one more rate increase by the end of the year.

But recent data have shown inflation slowing faster than expected, with many analysts anticipating a “disinflationary” trend may be developing that will work in the Fed’s favor.

Investors in contracts tied to the Fed’s policy rate are currently betting against any further increases, and expect the central bank’s next move to be a rate cut in the first months of next year.

Williams said that if inflation does continue falling, rate reductions would be appropriate next year so that the inflation-adjusted “real” rate of interest doesn’t increase through inaction.

“Assuming inflation continues to come down … then if we don’t cut interest rates at some point next year, then real interest rates will go up, and up, and up. And that won’t be consistent with our goals,” Williams said. “From my perspective, to keep maintaining a restrictive stance may very well involve cutting the federal funds rate next year.” 
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У лютому 2022 року, одразу після повномасштабного вторгнення РФ в Україну, курс досяг позначки понад 120 рублів за долар, але за кілька місяців російський Центробанк повернув його до довоєнних значень
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За даними видання, 176 європейських компаній відзначили знецінення своїх активів, «витрати, повʼязані з обмінним курсом», а також витрати щодо продажу, закриття або скорочення бізнесу
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