Fed keeps interest rate unchanged

The US economy appears "stronger than previously predicted" according to the Washington Post and as a result, the Fed has not changed the base rate after several increases in previous quarters.The base reserve rate will remain at 5.25-5.5%, the highest in 22 years. Is a recession now looming? Some economists think so. Are Americans feeling great about the economy? No.“Concerns about inflation are still something that I hear when I talk to people,’’ Boston Fed President Susan Collins told The Washington Post last month. “From my perspective, what price stability means is a level of low, stable prices where people aren’t really focused on it. … And people are still quite focused on it.’’

Inflation is coming down

You might not know it to look at your own household bills, but according to the Bureau of Labor Statistics’ April report, the Consumer Price Index (CPI) increased 4.9% since last April, a tenth of a percentage point lower than was predicted. The NY Times reports that inflation is starting to come down, which normally means lower prices for consumer goods such as food, clothing, energy, and appliances. Prices in some areas have fallen slightly, as the chart below shows, but others still rose, just at a slower pace than expected.