Taming inflation remains the Fed’s top priority, but even some central bank officials have expressed greater caution in determining additional hikes after the failure of three US regional banks in two months, including the collapse of First Republic Bank on Monday.
” Tighter credit conditions help the Fed curb demand to bring down inflation. Strong demand, coupled with a still-tight labor market, puts pressure on employers to raise wages and hire enough employees to meet demand. Those costs are then passed on to consumers. Fed officials have characterized the labor market as a major source of inflationary pressure. Data gauging US economic activity has been mixed so far. US gross domestic product rose by an annualized rate of 1.
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