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Fed monetary policy report flags elevated inflation and tight credit

The report said inflation rose further in spring, while credit conditions for small businesses and households remained tight and the housing market stayed stagnant.

Reported · Written up by our desk · Central Banks

The Federal Reserve acknowledged in its latest monetary policy report that inflation remains elevated and that the price stability goal has not yet been achieved, according to FXStreet.

The Fed also described broad labor market stability and said inflation rose further in the spring, adding that economic activity is expanding solidly despite uncertainty linked to the war in Iran.

In its assessment of financial conditions, the central bank said growth in the M2 money supply was moderate and broadly similar to the pace seen during the 2010s, while credit conditions for small businesses and households remained tight.

The report further noted that the housing market was stagnant, the financial system remained sound and resilient, and that valuations in stocks, corporate debt, and residential and real estate are above historic norms.

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