Many economic analysts have been predicting an interest rate hike in the near future, and the latest report from the Federal Reserve suggests it could come as soon as the end of the month. Published on Wednesday, March 7, the report noted “persistent labor market tightness across the United States, with accelerating wage gains in many regions.”
According to the Fed’s assessment, the labor market has seen slight gains since January, with demand for qualified workers remaining high in many sectors. Businesses in the manufacturing, construction and information technology sectors were most likely to report labor shortages during this period. The Fed described the pace of U.S. economic expansion as “modest to moderate” throughout January and February.
The report also found that four of the Federal Reserve’s 12 districts experienced a “marked increase” in steel prices as a result of a decline in foreign competition. Just a week prior to this report, President Trump announced his plan to impose stiff tariffs on steel and aluminum imports.
Based on the report’s findings, many analysts expect the Fed to announce a rate hike by April. In a December meeting, the Fed’s policymakers recommended three gradual interest rate hikes for 2018 to prevent a tight labor market from contributing to high inflation.
Generally speaking, there weren’t many surprises in the Fed’s assessment of the U.S. labor market. Barring any unforeseen developments, we can expect the nation’s central bank to stick with its plan to institute a series of three rate hikes by the end of the year.