Higher inflation is reemerging as a key challenge for middle market businesses as prolonged disruptions in the Strait of Hormuz push energy prices higher across the economy, writes RSM US Chief Economist Joe Brusuelas in the June issue of The Real Economy.
Rising oil and gas prices are increasing input costs for businesses and grocery prices for consumers while straining household budgets, adds Brusuelas. Consumers can expect further food inflation later this year as higher transportation costs continue moving through supply chains.
For the Federal Reserve, the return of inflation presents another challenge. If pricing pressures persist, the Fed may not only pause rate cuts but also consider raising its policy rate to maintain price stability.
Also in this issue, RSM analysts examine the evolving global financial services industry landscape amid technological and regulatory changes, including a rebound in mergers and acquisitions activity and the surge in prediction markets.
