Import price index. What does economic indicator mean and why the fed will raise interest rates after a rise?

Answer 1

The0 import price index is a measure of what American businesses and individuals pay for products imported. Since we import so much of what we consume, this index is one measure of inflation.

It's hard to say what the Fed will do from month to month. But the Fed generally raises rates when it is concerned about inflation. Higher interest rates tend to slow the economy. When the economy slows, demand slows, and prices tend to moderate.

Hope this helps.

Answer 2

Inflation