2023-11-09 09:25:31 ET
Inflation in the U.S. could reach 2% in the second quarter of next year, according to ING Economics.
Slowing rents, lower prices for gas and used cars, and tighter financial and credit conditions that could further weigh on corporate pricing power might cause inflation to move closer to 2% in the second quarter, a Thursday report by ING Economics said.
The Federal Reserve has acknowledged that for inflation to go down to 2%, there is still a long way to go.
U.S. consumer price inflation has fallen from a peak of 9.1% year-over-year in June 2022 to a low of 3% in June, but the progress stalled in August and September when the rate rebounded to 3.7% due to higher energy costs and resilience, wrote chief international economist James Knightley.
The annual rate of core inflation is still running at more than double the 2% target, he said, even though it has softened from a 6.6% peak in September 2022 to 4.1% now.
In addition, annualized GDP growth is at 4.9% in the third quarter, and unemployment is at 3.9%.
But “the Fed last hiked rates in July, and since then financial and credit conditions have tightened, with residential mortgages and car loans now having more than 8% interest rates while credit card borrowing costs are at all-time highs and corporate lending rates are moving higher,” Knightley wrote.
He also pointed out that the Federal Reserve’s Senior Loan Officer Opinion Survey (or SLOOS) shows that banks are increasingly reluctant to lend.
This combination could make it toxic for growth, he said.
And “with real household disposable incomes falling for the past four months amid evidence of increasing numbers of households having exhausted pandemic-era savings,” he added, “we expect to see GDP contract in at least two quarters in 2024,” which could lead to a slowdown in inflation in the first half of 2024.
These are some of the stocks most affected by inflation, according to Yahoo! Finance.
- Tractor Supply Company ( NASDAQ: TSCO )
- Beyond meat ( BYND )
- Whirlpool Corporation ( WHR )
- Coinbase Global ( COIN )
- MetLife ( MET )
More on Tractor Supply:
- Tractor Supply: Stock Is Down, But Still Not Quite A Buy
- Tractor Supply: Buy Rating Driven By Strong Earnings And Growth
- Tractor Supply Company 2023 Q3 - Results - Earnings Call Presentation
- Tractor Supply Non-GAAP EPS of $2.25 misses by $0.04, revenue of $3.41B misses by $60M
- Tractor Supply Q3 2023 Earnings Preview
For further details see:
Could the U.S. see inflation approach the 2% target in 2Q 2024?