Trouble in Your Tank: Organic Addition Agents in Electrolytic Copper Plating
Marcy’s Musings: Can You Hear the Voices?
Facing the Future: Successfully Navigating the Uncertain Path Ahead
Forecasting the Wind: IPC's Expert Economist on the Impact of Inflation Rates
October 31, 2023 | Shawn DuBravac, IPCEstimated reading time: 1 minute
In the enchanting world of Shakespeare's plays, prophecies often set the stage for unforeseen twists and turns. Just as Macbeth could not have anticipated the tumultuous journey that lay ahead after encountering the three witches, the financial markets and policymakers find themselves in a similarly uncertain terrain.
Take prices, which rose sharply in 2022. The Federal Reserve was slow to respond. Although the rate of inflation has declined since reaching its zenith last year, it continues to exceed the Federal Reserve's 2% inflation goal. “Higher for longer” is likely the mantra for interest rates. This prolonged period of higher interest rates will have a ripple effect on various sectors of the economy.
A Historic Battle with Inflation
For the past 18 months, the Federal Reserve has been battling historically high inflation with annual inflation peaking in June 2022 at 8.9%. Core price inflation, which excludes volatile categories like energy and food, peaked a few months later in September 2022 at 6.6%. Both measures remain high. Annual inflation is still running at 3.3% and core prices are 4.7% higher than they were a year ago.
The Federal Reserve was sluggish to respond to rising inflation, thinking that price increases were only temporary. The delay forced the Fed to move abruptly with a series of aggressive rate hikes. The Federal Reserve raised its target rate by 25 basis points in July, its 11th hike in 16 months. The Fed’s target federal funds range of 5.25–5.5% is the highest level since January 2001.
The Implications of Higher Rates
Tightening monetary policy has pushed interest rates up across the entire yield curve, and this impacts the economy in several ways. The yield on the 10-year Treasury bond is the highest it has been in 16 years. The rate was over 100 basis points lower just this spring. The elevated interest rates can act as a dampener on both consumer spending and business investment, leading to slower economic growth. Additionally, the shift in the yield curve can alter the risk-reward dynamics for various financial assets, influencing investor behavior.
To read Shawn's three ways that higher interest rates are likely to impact the economy in the coming year, click here.
This article originally appeared in the fall 2023 issue of IPC Community.
Share on:
Suggested Items
I-Connect007 Editor’s Choice: Five Must-Reads for the Week
04/18/2025 | Andy Shaughnessy, Design007 MagazineIt’s been a busy week in our industry. Never a dull moment! If you’ve been paying attention to our tariff tumult with China and its effect on the stock market, especially if your company does a lot of business with China, you might be tempted to call in a Xanax refill about now. But hang tight. This is still early in the first quarter. This brouhaha serves to underscore our need to manufacture critical laminates and components in the U.S. In this week’s must-reads, we have a potpourri of articles covering tariffs, the next generation of HDI, the three-year anniversary of IPC Mexico, a novel green technology, and emerging design trends.
Real Time with... IPC APEX EXPO 2025: Aster–Enhancing Design for Effective Testing Strategies
04/18/2025 | Real Time with...IPC APEX EXPOWill Webb, technical director at Aster, stresses the importance of testability in design, emphasizing early engagement to identify testing issues. This discussion covers the integration of testing with Industry 4.0, the need for good test coverage, and adherence to industry standards. Innovations like boundary scan testing and new tools for cluster testing are introduced, highlighting advancements in optimizing testing workflows and collaboration with other tools.
IPC President’s Award: Xaver Feiner
04/17/2025 | Nolan Johnson, SMT007 MagazineThroughout his career, Xaver Feiner, vice president of marketing and sales at Zollner Elektronik, has developed extensive expertise in account management and new business development with a strong focus on the semiconductor industry, aerospace, and industrial electronics. Xaver has cultivated a profound understanding of global markets and remains deeply engaged with the challenges and opportunities presented by digital transformation. Since 2020, he has been an active member of the IPC Europe Advocacy Group, where he is dedicated to advancing the position of the electronics industry and the EMS sector across Europe.
New High Power 3D AXI for Power Electronics from Test Research, Inc.
04/17/2025 | TRITest Research, Inc. (TRI), a leading provider of Test and Inspection solutions for the electronics manufacturing industry, proudly announces the launch of the 3D AXI TR7600HP system. Designed for power semiconductor inspection, the TR7600HP enhances accuracy and efficiency in detecting defects in components such as IGBTs, MOSFETs, SiC inverters, and Paladin Connectors.
IPC APEX EXPO 2025 Learning Lounge: Education on the Show Floor
04/16/2025 | Andy Shaughnessy, Design007The conference portion of IPC APEX EXPO has been providing educational opportunities for attendees since the first show. But recently, show managers decided to expand education onto the show floor.