Add as a preferred source on GoogleKabra Frames Consumer Divisions as a Fed Inflation Challenge
The Societe Generale strategist described widening divisions among U.S. consumers as a K-shaped economy. Third-quarter GDP grew at a 3.4% annualized pace.
Manish Kabra, a cross-asset strategist at Societe Generale, described widening divisions among U.S. consumers as a K-shaped economy and framed the divide as a challenge for the Federal Reserve’s effort to control inflation.
Real gross domestic product grew at a 3.4% annualized quarter-over-quarter rate in the third quarter. Consumer spending rose 3.8%, and business investment in equipment increased 20.9%. The third-quarter growth figures came as inflation pressures broadened.
Separately, Federal Reserve Bank of Cleveland President Beth M. Hammack warned that prolonged above-target inflation could shift wage and price expectations, making progress toward the Fed’s goal harder. Her warning about persistent inflation adds context to the Fed’s challenge.