Last month, the Federal Reserve raised the benchmark interest rates by 75 basis points for the second consecutive month to tame the multi-decade high inflation. The U.S. economy contracted 0.9% in the second quarter, making many analysts believe that a recession has already arrived.
Despite the uncertain macroeconomic conditions, inflation-adjusted consumer spending continued to rise. This, along with robust employment data, might encourage the Fed to consider more significant interest rate hikes, eliminating the possibility of the economy’s soft landing.
