Producer Prices Ease; Borrowing Costs Rise

U.S Treasury Secretary Janet Yellen has told the press that the current 40-year-high inflation will be “much lower” by the end of next year. Meanwhile, producer prices for final demand goods and services were still up 7.4% for the 12 months ended in November.

While this is the lowest rate of wholesale inflation since May 2021, the Federal Reserve projects interest rates will keep rising at least through 2023 to combat continued high inflation. The federal funds rate is expected to peak between 5% and 5.5% over the next 12 months.

This week’s 50-basis-points rate hike means the majority of small business loans will hit double-digit interest levels for the first time since 2007, reports say. 12/15/2022