The Fed is still trying to get inflation under control, and interest rates may remain high for the next year. In the June Numbers that Matter editorial livestream, Bill Wood talked about the impact that’s having on plastics end markets. Recording below.
“The economy is clearly gliding gradually. And I that I think that’s the best we can hope for at this time,” said Wood who is Plastics News economics editor.
The Fed’s goals are price stability — close to 2 percent inflation — and maximum employment.
“And by the Fed’s own projections — this is their projection — they’re going to be down to the 2 percent level that they’re aiming for sometime next year. So they’re sending out a not-so-subtle message that they’re not really in a hurry to lower interest rates at this time,” he said.
“They’re clearly going to stay restrictive at current levels for a long time and by a long time, I mean at least another year. Even if the Fed were to cut interest rates once or even twice this year — and that’s far from certain — it would be a symbolic gesture for sure, but they would still be restrictive.”
Wood talked about the impact that’s having on home construction, housewares, appliances and other markets.
Wood also talked about how prices of some goods and services, like insurance, have been rising, and whether plastics companies are in a good position to raise prices right now. At the moment, medical processors may be in a better position than others, including packaging, he said.
The next Numbers that Matter Live is scheduled for Tuesday, July 23.