July’s retail sales report showed sales increased by nearly double what economists had expected, adding to a long list of data points that have shown a more resilient consumer than many had projected.
While the upbeat data has economists predicting the US economy won’t contract over the next year as initially projected, it also has some fearing that too much exuberance may mean another Federal Reserve interest rate hike is on the horizon in an effort to keep inflation cooling.
“This robust increase won’t comfort Fed officials and keeps the risk of tighter monetary policy very much on the table,” Oxford Economics’ lead US economist wrote on Tuesday. “Fed Chair Powell will likely strike a hawkish tone at the Jackson Hole Economic Symposium next week.”
Last month, Powell responded to a reporter question over whether robust spending could reinvigorate inflation or if it’s good news.
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