Energy cost rises and cooling house market to slow growth

Despite strong economic growth since the start of the year, the Federal Open Market Committee is expecting growth to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices. This was one of the reasons it opted to increase interest rates by a further 25 basis points to 5% at its meeting on 10 May. It says the increase in prices of energy and other commodities appears to have had only a modest effect on core inflation, while ongoing productivity gains have helped to hold the gr...