Federal Reserve Banks Warn of New Inflationary Pressures
The Federal Reserve district banks warned today that strong economic growth is creating inflationary pressures and that dry weather in the Central Plains may send food prices spiraling again later this year.
In its March survey Current Economic Conditions, the Fed’s 12 district banks reported that economic activity appeared to be expanding “at a moderately strong pace” through March 8.
“Consumer spending, except for autos, has apparently gained momentum while manufacturing, especially for export, continues to show strength almost everywhere,” the report said.
“In this environment,” the report warned, “there is evidence of pressures on costs and prices.”
The Fed’s concern about inflation has led it to raise interest rates gradually since last spring.
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