Fed Warns of Inflation Risks as Manufacturing Sector Shows Growth

The US economy has been shaped by rapid adoption of AI, shifting geopolitical dynamics, and demographic trends. The Federal Reserve's 2% inflation target has not been met for over five years, with upside risks to inflation.

Fed Vice Chair Jefferson stated that the Fed may take more time before its next rate decision, driven by incoming data. He emphasized the importance of price stability and warned that persistent inflation could spill into inflation expectations.

The US manufacturing sector showed growth in September, with a notable increase in new orders leading to production expansion and employment increases. However, factory capacity remained under pressure, and supply chains were stretched due to long lead times for input delivery.