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(WASHINGTON) — Last Monday, FBI officials raided former President Donald Trump’s Mar-a-Lago home in Palm Beach, Fla., executing a court-ordered search warrant the Department of Justice later revealed was related to possible violations of three criminal statutes.
Officers seized a total of 27 boxes from Mar-a-Lago, with 11 containing classified documents — including top secret information.
ABC News contributor and former federal prosecutor Kan Nawaday spoke with ABC News’ Phil Lipof about what stands out to him in the search warrant, the top secret materials in the boxes and what officials are likely doing now.
PRIME: ABC News contributor and former federal prosecutor Kan Nawaday again with us tonight for some insight on all of this. Kan, thanks for being here. Let’s take a look at the search warrant first. We both have a copy of it. What stands out to you in the search warrant?
NAWADAY: First off, the huge big powder keg in this is the fact that the judge found probable cause to believe that there was a violation of the Espionage Act.
PRIME: And that’s no small feat. We’re talking about espionage here.
NAWADAY: Exactly. What that means is that they think that there was mishandling of top secret information that was transmitted to unauthorized persons. This is the exact same statute that [National Security Agency whistleblower Edward] Snowden was charged with.
PRIME: All right. So let’s move on to the receipt here, the things that they say they took in this search of the former president’s home. You can see at the top a grant of clemency for Roger Stone, information on the president of France, then we see as you move down secret documents, miscellaneous, then we have top secret documents, confidential documents, more top secret documents. Talk about top secret for a minute, because, you know, people can throw that term around, but what does that mean?
NAWADAY: And you’re exactly right. Feel like people throw that term around. But it’s actually very, very specific. What top secret means is a type of document or information that if it gets out there, it can cause exceptionally grave damage to our national security. So it’s really important stuff, it’s sensitive stuff. And the thing that sticks out to me is item “2A,” various TS/SCI documents.
PRIME: That SCI.
NAWADAY: Right, SCI means this is top secret stuff that can only, and should only, be viewed within a certain facility that’s basically protected from data leaks.
PRIME: They’re called skiffs, right?
NAWADAY: Exactly.
PRIME: No phones allowed, nothing. This is where you view these documents exactly.
NAWADAY: Like you cannot take your phone in, you’re not going to get any emails…that’s how sensitive this material is, and they have it there.
PRIME: So then what do they have to do now? Are they concerned about people who may have seen this or where this material may have gone?
NAWADAY: Absolutely. My money’s on what the FBI, and national security professionals are doing right now — they’re looking through everything they’ve gotten from the search and they’re trying to figure out who else may have seen this highly sensitive material.
PRIME: That’s a big task. Yes. Especially with everything that we see they took. OK. Former federal prosecutor and ABC News contributor Kan Nowaday, thanks so much for joining us again, we do appreciate it.
(WEYAUWEGA, Wisc.) — A Wisconsin man, 51-year-old Tony Haase, has been arrested for a 1992 double murder after police used DNA from a recent traffic stop to connect him to the crime. He told police last week he was in a “drunken stupor” and has “snippets” of memories of the crime, according to the criminal complaint.
On March 21, 1992, Timothy Mumbrue, Tanna Togstad and Togstad’s dog were found stabbed to death at Togstad’s Weyauwega, Wisconsin, home, according to the Wisconsin Department of Justice.
The murders went unsolved for decades, even as police collected DNA, re-tested evidence, conducted interviews and executed search warrants, according to the criminal complaint.
At one point Haase was identified in the investigation, the criminal complaint said. A DNA sample was taken from a pen Haase used during a traffic stop in July 2022, and that DNA sample was determined to be a match to fluids on Togstad’s body, the complaint said.
In a police interview on Aug. 11, 2022, Haase revealed his father was friends with Togstad’s father, according to the complaint.
Haase told investigators that he’d never been to Togstad’s home and denied involvement in the murders, the complaint said.
But Haase also told police “he had ‘snippets/blurbs’ of memories through the years that he attributed to the murders,” the complaint said. “Those ‘snippets’ included remembering walking down the front steps of the house and vomiting in the yard” and leaving her driveway, the complaint said.
Haase said those memories “made him very nervous and scared that he was involved,” according to the complaint.
He later told police that his father died a snowmobile accident when he was a child. Haase said several people were racing and collided, and that one of the snowmobile drivers was Togstad’s father, the complaint said.
Haase told police that the night of the crime, he got “very drunk” and started thinking about his father’s death, which led him to thinking about going to Togstad’s home, the complaint said.
In a “drunken stupor,” Haase said he had a “scuffle” with Mumbrue, “and he moved his arm in a stabbing motion toward Mumbrue’s chest,” the complaint said.
Haase said Togstad yelled, “what the f—” and he then punched her in the face, the complaint said.
When “Togstad started to ‘stir,'” he said he stabbed her in the chest, the complaint said.
Haase said the crime was not planned and “he did not know why he did it,” according to the complaint. He said when he “saw the news report he thought ‘Holy f—, what did I do,'” the complaint said.
Haase, of Weyauwega, was charged Friday with two counts of first-degree intentional homicide, the Wisconsin Department of Justice announced Monday. He does not have an attorney. He has not entered a plea and is due back in court on Tuesday.
(WASHINGTON) — The Justice Department said in a new court filing Monday that it opposes an effort by multiple media organizations, including ABC News, to unseal the supporting affidavit behind the now-public search warrant for former President Donald Trump’s Mar-a-Lago estate.
“There remain compelling reasons, including to protect the integrity of an ongoing law enforcement investigation that implicates national security, that support keeping the affidavit sealed,” the filing states.
In a footnote, department officials write that they “carefully considered” whether they could release the affidavit with redactions, but the redactions necessary to “mitigate harms to the integrity of the investigation would be so extensive as to render the remaining unsealed text devoid of meaningful content, and the release of such a redacted version would not serve any public interest.”
However, if the magistrate judge were to order the partial unsealing of the affidavit, “the government respectfully requests an opportunity to provide the Court with proposed redactions.”
The department also says that it does not object to the unsealing of other materials filed in connection with the search warrant, “whose unsealing would not jeopardize the integrity of this national security investigation,” but with minor redactions to protect government personnel. This would consist of “cover sheets associated with the search warrant application, the government’s motion to seal, and the Court’s sealing order.
The government has filed those under seal and is asking the court to unseal them.
Further explaining their request to keep the underlying affidavit sealed, prosecutors note it “would serve as a roadmap to the government’s ongoing investigation, providing specific details about its direction and likely course, in a manner that is highly likely to compromise future investigative steps.”
They briefly detail some of the information in the affidavit that has been reviewed by Magistrate Judge Bruce Reinhart, noting that, “it contains, among other critically important and detailed investigative facts: highly sensitive information about witnesses, including witnesses interviewed by the government; specific investigative techniques; and information required by law to be kept under seal” under grand jury rules.
“In addition, information about witnesses is particularly sensitive given the high-profile nature of this matter and the risk that the revelation of witness identities would impact their willingness to cooperate with the investigation,” prosecutors note — highlighting stories regarding an increase in threats to law enforcement that has followed the search of Mar a Lago.
“Disclosure of the government’s affidavit at this stage would also likely chill future cooperation by witnesses whose assistance may be sought as this investigation progresses, as well as in other high-profile investigations,” the filing states. “The fact that this investigation implicates highly classified materials further underscores the need to protect the integrity of the investigation and exacerbates the potential for harm if information is disclosed to the public prematurely or improperly.”
The unsealing could also impact the civil liberties of those whose actions are detailed in the underlying affidavit, prosecutors said.
This is a developing story. Please check back for updates.
Eva Marie Uzcategui/Bloomberg via Getty Images, FILE
(WASHINGTON) — Sens. Mark Warner, D-Va., and Marco Rubio, R-Fla., the chair and vice chair of the Senate Intelligence Committee, respectively, have sent a private letter to top intelligence officials and the Justice Department asking for more information from last week’s unprecedented FBI search at Mar-a-Lago.
The letter, sent Sunday to Director of National Intelligence Avril Haines and Attorney General Merrick Garland, specifically seeks the classified documents that were seized and an analysis of any national security threat posed by the mishandling of the information.
The request comes after it was revealed that 11 sets of classified information were seized from former President Donald Trump’s Florida resort, including confidential, secret and top-secret documents.
The letter, first reported by Axios, also is seeking to get to the heart of the rationale behind the search, which Garland said he personally approved.
“The Senate Intelligence Committee is charged with overseeing counterintelligence matters, including the handling and mishandling of classified information, which appears to be at the core of the search of Mar a Lago,” said Rachel Cohen, a spokesperson for Warner who confirmed the letter and its contents but would not share it.
The letter from Warner and Rubio is the first bipartisan outreach from Congress asking for more information from the search. Other House committees have requested information on the fuel behind the search and what was found, though those appeals were spearheaded by Democrats.
Reps. Carolyn Maloney, D-N.Y., and Adam Schiff, D-Calif., the chairs of the House Oversight and Intelligence Committees, respectively, sent a letter over the weekend asking Haines to conduct a damage assessment on the classified information recovered from Mar-a-Lago.
“In his remarks, Attorney General Garland claimed there was a substantial public interest in the execution of an unprecedented search warrant on President Trump. As such, the Intelligence Committee has asked the Department of Justice to share with us, on a classified basis, the specific intelligence documents seized from Mar-a-Lago,” Rubio said through a spokesperson.
Rubio also sent a letter to FBI Director Christopher Wray requesting a meeting to discuss the search.
A spokesperson for DNI Haines declined to comment on both the request by Senate Intelligence Committee leaders and the separate joint request for a damage assessment made by Schiff and Maloney.
The search on Trump’s Florida residence sparked both a backlash from Republican allies over claims that the investigation is a political effort and Democratic questions over the handling of the classified information found at Mar-a-Lago, which included top-secret, sensitive compartmented information (SCI) material, a classification of materials that sometimes involves nuclear secrets.
SCI material is also intended to only be handled in secured locations.
Trump has offered an array of explanations over the search, including saying that evidence was planted, that he had declassified the documents prior to leaving the White House and that the documents obtained by the FBI were protected under attorney-client and executive privileges.
Kent Nishimura / Los Angeles Times via Getty Images, FILE
(CHEYENNE, WYO.) — Perhaps no midterm primary is getting more attention than that of Wyoming Rep. Liz Cheney, whose race next week could be the highest-profile test yet of the voter backlash — or lack thereof — to a Republican participating on the House Jan. 6 committee and whether anti-Trump conservatives have a path forward within their own party.
On Tuesday, residents of the least populous state in the nation will hand down their answer. As it stands, Cheney’s chances for reelection are slim: Her opponent, Wyoming attorney Harriet Hageman, bests her in past head-to-head polling match-ups, according to FiveThirtyEight, helped in part by a blessing from former President Donald Trump. (FiveThirtyEight noted earlier this year that public polling on the race has been sparse.)
On Thursday, Cheney released an ad crystalizing her closing argument: The “big lie” about the 2020 election — and Trump’s embrace of it — is ruining democracy.
Cheney called it “insidious.”
“It preys on those who love their country,” she said in the ad. “It is a door Donald Trump opened to manipulate Americans to abandon their principles, to sacrifice their freedom, to justify violence, to ignore the rulings of our courts and the rule of law.”
Whether that pitch persuades enough of her party’s base will soon be made clear. But interviews with approximately a dozen voters in Wyoming in recent days show they have other things on their mind.
Republicans in the state that Trump won with 70% of the vote told ABC News that they feel increasingly distant from their three-term congresswoman. And while they said they are unhappy with Cheney’s prominent position on the Jan. 6 committee, which she vice-chairs, and her hardline stance against Trump’s baseless election attacks, the Wyoming residents also said they felt she no longer represented them politically, either.
“After she jumped in on the Jan. 6 thing, and she jumped in on the impeachment, she was nowhere to be found. She wasn’t meeting with the people. She doesn’t care about us,” Myrna Burgess told ABC at the Laramie County Fair.
“She’s tone-deaf to even listening to us,” said Burgess, also claiming that the congresswoman had taken a soft stance on Second Amendment rights because she like 13 other Republicans voted for a recent bipartisan anti-gun violence package. Burgess said that decision was another indicator that she’s out of touch with voters.
“When she starts voting against the Second Amendment, that is a total dealbreaker,” Burgess said.
Accusations that Cheney is mostly absent from the state have also been capitalized on by challenger Hageman.
“I am the only candidate that has traveled around this state,” Hageman said at a recent event.
Cheney has been campaigning in Wyoming, as evidenced by photos shared by her team on social media, though she isn’t holding wide-scale, big-tent events the way her opponent is. But that’s because of concern for her safety after becoming one of the country’s most visible anti-Trump Republicans, according to Wyoming state Rep. Landon Brown, a Cheney surrogate.
“She has to have private events that are not announced to the general public because of her safety. And that’s a crying shame that somebody stood up for what they believed in in Congress, and they are now in a position where they have to worry about their safety and their family safety,” Brown said.
Brown, like Cheney, said the race is about the existential choice facing the Republican Party: between embracing Trump’s endless insistence the last presidential race was stolen from him — or moving on.
In an interview with ABC News’ Jonathan Karl last month, Cheney said her work highlighting Trump’s attacks on elections was more important than being elected. But she said then that she was working to win.
“The single most important thing is protecting the nation from Donald Trump. And I think that that matters to us as Americans more than anything else, and that’s why my work on the committee is so important,” she told Karl.
“This is bigger than one person’s presidency. This is our Constitution. This is our history. This is what we’re going to be remembered for. And that’s exactly what Liz is remembering. And there’s a lot of people in my district alone, but as well as other people out there, that they feel the exact same way,” Brown said. “And unfortunately, you know, everything lands in Wyoming’s lap right now.”
That’s where Democrats are — potentially — coming in, in an unusual last-minute push to cross party lines to try and save an anti-Trump lawmaker who nonetheless had voted with Trump more than 90% of the time.
In Wyoming, voters can change party affiliations at relevant county clerk offices no later than 14 days before the primary election, or at polling locations on the day of the primary or general election. State law also allows voters to switch their party affiliations back for future elections.
That makes it theoretically easy for Wyoming Democrats to vote as Republicans in Tuesday’s primary. Still, an analysis by FiveThirtyEight showed it’s unlikely they’ll make up the deficit with Republicans, given how many more conservatives there are in the state: 70% of voters in the state are registered with the GOP.
And in every midterm election in the past decade, more than 80% of primary votes cast have been for GOP candidates, meaning even those who haven’t declared their party affiliation are more than likely to lean red.
Several Wyoming Democrats who turned on their own party and temporarily registered as Republicans told ABC News that they didn’t make the choice lightly.
“The first time in my life I am a registered Republican,” said Laramie resident Megan Hayes. “That gave me a little bit of a rash, but I did it and I already voted and I got an absentee ballot and I did vote for Liz Cheney,”
Language on the Cheney campaign website directs voters interested in crossing the aisle to the county clerk’s office — though the Cheney campaign rejects any notion that they are targeting Democrats specifically.
“I’ve never received these kinds of mailers and certainly not in this abundance for one race ever,” said Connie Wilbert, a longtime Wyoming Democrat who has temporarily changed her voter registration status in order to vote for Cheney.
She said she’s received stacks of mailers urging her to make the switch. Around her neighborhood, where she said mostly includes lifelong liberals, are swaths of Cheney yard signs.
“While I disagree with her on virtually everything else, all policies. I respect the heck out of because the taking this stand and I think it’s really important,” Wilbert said.
The Cheney campaign insists they aren’t targeting Democrats, but said they’ll welcome any support.
Behind much of the party-switching push is a group called Wyomingites Defending Freedom And Democracy, which earlier this week even cut pro-Cheney ads with Democratic Reps. Tom Malinowski of New Jersey and Dean Phillips of Minnesota.
Their efforts may have begun to work: At least for a few thousand registered Democrats appear to have changed their registration over the past month, according to state elections data.
If — somehow — Tuesday’s race ends up being close, that might be key.
“There aren’t enough Democrats to … sway this. If one candidate wins by 5,000 votes. Those Democrats who switched had no real sway,” said Jim King, a political science professor at the University of Wyoming. “If the race was decided by 500 votes, well, then those people would have perhaps had an influence.”
(KABUL) — It’s exactly one year since the Taliban took control of Afghanistan’s capital of Kabul, barring most women from having jobs, and all girls from seeking more than a sixth grade education.
While the militants are celebrating what they call “Independence Day” on the streets of Kabul, a small group of women were protesting in the streets. Some were beaten by the Taliban for doing so.
ABC News Chief Foreign Correspondent Ian Pannell sat down with Abdul Qahar Balkhi, a Taliban spokesman, who denies women and girls are being oppressed.
“Women are being given their rights… each society interprets rights of human beings, men, women, children, neighbors, the planet, animals, differently,” he claims.
Pannell reports that more than 90% of Afghans no longer have enough to eat. He says one year after America’s withdrawal lapsed into chaos Afghanistan is isolated, sadder and hungrier than ever.
(LONDON) — Prince Harry and Meghan, the Duke and Duchess of Sussex, are heading back to Europe in September.
The couple, who support several charities, will attend the One Young World 2022 Manchester Summit in the United Kingdom on Sept. 5, the Invictus Games Düsseldorf 2023 One Year to Go on Sept. 6 in Germany and the WellChild Awards on Sept. 8 in the U.K., according a spokesperson for the Duke and Duchess of Sussex.
In an Instagram post, One Young World announced that Meghan will be delivering a keynote address at the summit’s opening ceremony. The organization also shared that Meghan and Harry will be meeting with a group of summit delegates “doing outstanding work on gender equality.”
The organization holds a special place in the duchess’ heart. She served as a counsellor for its summit in Dublin in 2014 and also during its summit in Ottawa, Ontario, in 2016. One Young World noted how the Duchess of Sussex has continued to support One Young World ambasssadors, particularly those working for equal rights for women and girls.
“When I was asked to be a Counsellor at One Young World my response was a resounding yes!” Meghan said in a statement shared by the group. “One Young World invites young adults from all over the world who are actively working to transform the socio-political landscape by being the greater good.”
The Invictus Games Düsseldorf and WellChild also shared their excitement on social media about the duke and duchess attending their events. More information will be announced in the coming weeks, the organizations each said.
The One Young World Summit will be Harry and Meghan’s third time back in the U.K. this year, since they stepped down as senior working royals in 2020.
In April, they retuned to the U.K. together and made a private visit to Queen Elizabeth on their way to the Netherlands for the Invictus Games. The couple then came back to the U.K. in June for the queen’s Platinum Jubilee.
Prince Harry and Meghan currently live in California with their two children, Archie and Lilibet Diana Mountbatten-Windsor.
(NEW YORK) — New York City officials are holding a town hall Monday to discuss the ongoing monkeypox outbreak as cases continue to climb and thousands of vaccine appointments over the weekend were swept up within minutes.
Currently, there are more than 2,300 confirmed cases in the Big Apple with Manhattan having the most at 917, according to data from the city’s Department of Health and Mental Hygiene.
Brooklyn has the second-highest number of cases at 472, followed by the Bronx with 310, Queens with 278 and Staten Island with 13. It’s unknown which boroughs the remaining cases are from.
In response to the outbreak, the NYCDOHMH will be holding an event in the Bronx with Dr. Madhura Ray, director of the department’s Data and Analytics for Childcare, to discuss vaccination sites, testing, outreach for at-risk populations and preventative measures.
The event is being held in partnership with Bronx Borough President Vanessa Gibbons — who will be hosting the town hall — and Destination Tomorrow, an LGBTQ advocacy group.
“[Gibbons] has been concerned over the slowness in getting vaccinations and concerned about awareness,” the borough president’s press secretary, Arlene Mukoko, told ABC News. “We want people to fully know what [monkeypox] is, how it can get transmitted. The New York City Department of Health is saying anyone can get it so how does that work? How is outreach going?”
She continued, “We want to make sure everyone is getting treated in a way that is empowering. It’s a community conversation.”
Of all New York City cases with available race/ethnicity information, Black and Hispanic people have made up nearly 55% of documented infections — particularly relevant in the Bronx, which is largely made up of Black and Hispanic residents, according to the most recent U.S. Census data.
Most of New York City’s infections have occurred among men between ages 25 and 44 who identify as LGBTQ, according to data from the NYCDOHMH.
Health officials, however, have stressed that anyone is at risk if they have intimate contact with an infected patient or come into contact with their lesions.
It comes just one day after more than 6,000 new vaccine appointment slots across the city were filled in under one hour, according to Manhattan Borough President Mark Levine. He decried the lack of supply and called on health officials to increase the number of available doses.
“There are still many people at risk who haven’t been able to access this vaccine. We need more supply for NYC [as soon as possible],” he tweeted Sunday.
(WASHINGTON) — Former President Donald Trump’s personal attorney, Rudy Giuliani, has been informed that he is considered a “target” of the Georgia criminal investigation probing the effort to overturn the results of the 2020 election in that state, according to sources familiar with the matter.
An attorney for Giuliani received a call Monday informing them that he is a “target” of the investigation, the sources said.
The move comes just two days before Giuliani is set to testify before the Fulton Country special grand jury probing the case, as the investigation appears to be ramping up.
Giuliani is still expected to testify on Wednesday, the sources said.
Last week, an attorney for Giuliani said in court that Giuliani’s legal team had been asked the district attorney “whether or not Mr. Giuliani is a target of this investigation,” but had “not yet received a response.”
The judge in the case, Fulton County Superior Court Judge Robert McBurney, said he “would implore” the DA to “at least address that before [Giuliani] gets here.”
Earlier, 16 so-called “alternate electors” in the state were informed that they are also considered “targets” of the probe.
The House committee investigating the Jan. 6 attack on the U.S. Capitol has said that a plan set up by the Trump campaign in multiple swing states sought to assemble “groups of individuals in key battleground states and got them to call themselves electors, created phony certificates associated with these fake electors and then transmitted these certificates to Washington, and to the Congress, to be counted during the joint session of Congress on January 6th.”
The special grand jury seated in the investigation does not have the ability to return an indictment, and can only make recommendations concerning criminal prosecution.
(NEW YORK) — Lower-than-expected inflation rates last week sent the S&P 500 soaring to its highest level in three months, reflecting optimism that price increases have peaked as businesses and consumers seek relief from budget-busting costs.
While still elevated, price hikes last month waned from the near-historic pace reached in June, according to a release from the Bureau of Labor Statistics on Wednesday. The consumer price index, or CPI, rose 8.5% over the past year as of July, a marked slowdown from a 9.1% year-over-year rate measured in June, the bureau said.
Moreover, the inflation rate saw a 0% rise on a monthly basis in July, after rising 1.3% on that measure in the month prior.
Previous optimism about inflation, however, has proven misguided. Before last month, the problem that most Americans consider their top economic priority had reached its most dire level.
Still, progress on the supply-demand imbalance that sits at the root of price increases suggests that the U.S. has reached peak inflation, economists told ABC News. An easing of supply chain bottlenecks has coincided with an aggressive series of borrowing cost increases from the Federal Reserve, which could very well have slowed the economy and slashed demand, they said.
“We’re getting relief on the global supply stage,” David Rosenberg, founder of Rosenberg Research and former chief economist for North America at Merrill Lynch, told ABC News. “On top of that, we’re seeing disruption of demand.”
“Why on earth would you think inflation will go up?” he added, citing the firm commitment to raise interest rates expressed by Fed Chair Jerome Powell.
But economists differed sharply in their assessment of how much the supply-demand imbalance has been resolved, and in their expectations for how much inflation will fall. And even as price hikes slow down, some costs for consumers, like rent, and for businesses, like wages, will persist at elevated levels, economists cautioned.
They also warned that inflation could take a turn for the worst if the global economy suffers a shock, such as a significant escalation of the war between Russia and Ukraine or a more infectious strain of COVID-19.
“The pandemic is kind of like Lucy with the football,” Martha Olney, an economist at the University of California, Berkeley, told ABC News. “We keep pretending that this time we’ll kick the football. We keep pretending that this time the pandemic is over.”
Like many economic problems, inflation largely owes to an imbalance between supply and demand.
As the pandemic eased, a surge in demand for goods and services followed a pandemic-induced flood of economic stimulus. Moreover, that stimulus brought about a speedy economic recovery from the March 2020 downturn, triggering a hiring blitz.
But the surge in demand far outpaced supply, as COVID-related bottlenecks slowed delivery times and infection fears kept workers on the sidelines. In turn, prices and wages skyrocketed, prompting sky-high inflation.
Signs point to an easing of these fundamental forces behind price increases, however, Jeffrey Roach, the chief economist at LPL Financial, told ABC News. Import prices fell in July for the first time in seven months, suggesting that supply chain bottlenecks are loosening up, according to data released by the Labor Department on Friday.
Meanwhile, the economy has seen a decline in demand for some key products like gasoline, which on Thursday fell below $4 per gallon on average nationwide for the first time since March. Many economists expect that overall demand will fall in the coming months, as the Fed pursues rate hikes aimed at slowing down the economy.
“Aggregate demand is slowing down, and supply chains are improving,” Roach said. “The market is pretty happy we’re at that inflection point.”
But it remains to be seen just how much supply and demand have balanced out, Olney, of the University of California, Berkeley, said. She questioned whether Fed rate hikes have reduced consumer demand, with the exception of a slowdown in construction that shows appetite in the housing market has waned. “I think the jury is out,” she said.
Beyond supply and demand, inflation expectations among consumers and businesses can also impact the trajectory of price hikes, Olney added. Perception helps drive the prices that companies will put forward and consumers will tolerate.
Data on consumer price expectations has shown improvement over the last couple of months. A widely observed measure of consumer sentiment, published by the University of Michigan, markedly increased last month, indicating that inflation fears have eased somewhat, according to a report released on Friday.
Nevertheless, even as inflation declines, price increases for some goods will likely remain elevated or even speed up, Roach, of LPL Financial, said. One such expenditure, rental costs, will stay sky-high over the near term in part because customers sign leases that lock them in at prices for a year or longer. “Folks don’t reset rental costs as frequently as the store can reset milk prices,” Roach said.
High labor costs for businesses will also likely endure, Michael Pugliese, an economist at Wells Fargo Securities, told ABC News. The economy showed unusually strong hiring last month, along with elevated wage increases that saw hourly earnings go up 5.2% on a yearly basis. Those wage hikes are “still well above what prevailed before the pandemic,” Pugliese said.
The economists, including Pugliese, described the inflation data released this week as a welcome development but said more evidence will be necessary to show that a sustained, significant decline in inflation has begun.
In a report he wrote about the new inflation data, Pugliese used the subtitle, “A Journey of a Thousand Miles Begins with a Single Step.”
