Inflation Continues to Grow Impacting All Parts of the Economy

Price pressures continue on the American economy as inflation showed no signs of slowing in the latest report Friday morning, rising 2.8% month over month.

The number was almost identical to the previous month’s growth. While Wall Street opened higher on Friday and Treasury Yields lowered, the ten-year is still at 4.7%.

Wall Street is now betting that the first-rate cut would not come until at least September. While the report could have been worse as some feared even higher inflation reports, any optimism for interest rate relief is being taken out of the market..and may only come if the labor market shows weakness.

The housing market is already being impacted with sales growth slowing not only because of limited supply, but first-time homeowners who were optimistic earlier in the year that they would benefit from lower interest rates, are showing signs of waiting.

Homeowners locked into lower interest rates have even less reason to move, and landlords continue to benefit.

Consumers, however, are still spending in spite of higher prices with spending growth of 0.8% but savings rates fell by 3.2%. The Fed will be watching consumer behavior more than housing prices when making its policy decisions.

Still, the impact of inflation on retail banking will continue from everything from small business loans to mortgages and credit card rates.