Fed survey expects slowing growth on higher inflation

A report from the Federal Reserve showed on Wednesday that the US economy expanded at a modest pace in the period from mid-May to mid-July, while the central bank struggled to curb inflation that reached a 40-year high.

According to “Reuters”, the bank issued its latest report to monitor the state of the economy while it is moving forward with aggressively interest rate hikes in order to curb inflation, but it also raises fears of recession.

The US Labor Department said earlier on Wednesday that consumer prices rose 9.1 percent in June on an annual basis, driven by higher costs for gasoline, food, rent and other items.

The US Federal Reserve said, based on a survey it conducted in 12 regions through July 13, “several regions reported increasing signs of slowing demand, and contacts in five regions indicated fears of an increased risk of a recession.” Federal Reserve policymakers are closely watching reactions from business contacts across the country as they analyze the economic outlook.