US Consumer Spending Declines Amid Falling Inflation

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• US consumer spending decreased by 0.2% in January
• Inflation dropped to 2.5% from the previous year
• Core prices fell to 2.6%
• Concerns persist over economic uncertainty
• White House tariff threats could impact progress in curbing inflation

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Impact of Federal Reserve's Interest Rate on Borrowing Costs

• Carr expressed frustration over the uncertainty caused by the Federal Reserve's decision to maintain a key short-term interest rate at 4.3%, leading to the cancellation of planned investments in artificial intelligence and online commerce.
• The elevated interest rate set by the Fed has resulted in higher borrowing costs for mortgages, auto loans, and credit cards, affecting individuals and businesses alike.
• The Fed's focus on using a specific inflation measure, different from the consumer price index, to guide their policy decisions highlights their strategy to combat rising inflation and its impact on the economy.

Source

bostonglobe.com

Impact of Tariffs on Inflation and Economic Growth

• A 20 percent tariff on products from China could force many toy companies to raise prices, as around 80 percent of toys sold in the US are made in China.
• Concerns arise about the potential effects of tariffs on inflation and economic growth, with uncertainties leading to caution among businesses and consumers.
• The threat of tariffs poses a risk of either pushing up inflation, slowing the economy, or a toxic combination of both, creating challenges for policymakers in maintaining economic stability.

Source

bostonglobe.com

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