Federal Reserve Chair Jerome Powell, speaking at last week’s symposium in scenic Jackson Hole, WY, stated that inflation remains too high and would not rule out further interest rate hikes.
That’s a little more hawkish than recent comments from Philly Fed chief and former University of Delaware President Patrick Harker.
Harker sits on the Open Market Committee that sets interest rates and is not viewed as a dove in fighting inflation. (Harker always adds the disclaimer that his views do not represent those of the Fed).
Below is a 14-minute video of Powell’s remarks:
One worrisome factor for the Fed is rising gas prices after a decline that had been a factor in a leveling off of inflation.
Gas is not a big part of many budgets, but its effects make their way through the economy. This week, we did see the price at the pump drop a few cents a gallon in Delaware.
Also on the inflation front, I received an Email from accounting and tax software vendor Intuit announcing a 20% increase in its cloud subscription. While the dollar amount is small it shows that tech giants are more than willing to impose price increases.
To its credit, Intuit, which owns TurboTax, MailChimp and QuickBooks, has not followed the tech world’s practice of mass layoffs, often to appease shareholders. So maybe I am helping someone keep his or her job.
Later that night, I found a parking ticket from the City of Newark that amounted to $35 for being 10 minutes late from a dinner. Had I waited to pay until early September the cost would soar to $70. That’s from the former base rate of $20. The higher rate came earlier this year as the city faces rising costs and issues with parking fine evaders.
The downside for Newark is the possibility of people being angry enough to not return to Main Street – at least for a while. I won’t be one of them, although I did see that the city put those revenues to work with a shiny new gas-fueled parking enforcement van.
The overall danger is that interest rate hikes and heftier fines that can be blamed on inflation will overshoot the runway and trigger a serious recession, rather than a “soft landing” – if there is such a thing.
Meanwhile, Delaware, after a sluggish recovery from Covid-19 saw job growth running above the national average, with a narrowing of the wide gap between First State and national jobless rates.
One promising sign is a backlog of business news that leaves our humble site playing catch up, well into the weekend.- Doug Rainey, chief content officer.
