Best Small Cos. A sharp increase in energy prices could be the party pooper for a turnaround in the U.S. economy, two Federal Reserve officials said on Friday. In separate appearances, Richmond Fed President Alfred Broaddus and Chicago Fed President Michael Moskow cited increasing costs for gasoline, natural gas and electricity as potential spoilers for the U.S. economy as it tries to climb out of the doldrums.
Energy prices are a risk to the outlook going forward.
It's clearly one of the downside risks at this point. Fed officials keep a close eye on consumer confidence since it feeds directly into spending, which accounts for two-thirds of U.S. economic activity. The Fed has cut interest rates four times this year, most recently on April 18, to boost the economy. So far it has cut short-term interest rates 2 percentage points to 4.5 percent. The Fed next meets on May 15 when it is once again expected to cut interest rates.