US inflation rises but economic growth slows.

In the first three months of this year, the US economy grew by less than anticipated, but inflation picked up steam, potentially delaying a reduction in interest rates.

US inflation rises but economic growth slows.
US inflation rises, but economic growth slows.
According to official data, the economy grew at an annualized pace of 1.6%, far less than predicted and in line with the growth observed in the last few months of 2023.In the meantime, the rate at which prices are rising—known as inflation—has gone up.

Experts had been predicting a string of US interest rate drops at the beginning of the year.The US Department of Commerce released data on Thursday indicating that inflation climbed by 3.4% in the first three months of 2024, indicating that inflation has yet to return to the Federal Reserve’s 2% objective. In contrast, there was 1.8% growth in the last three months of 2023.

In theory, raising interest rates is supposed to encourage consumers to cut back on their spending by making borrowing more expensive for items like loans and mortgages. The theory behind this is that by reducing demand, it lowers inflation.

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