September Inflation Exceeds Expectations: More Fed Rate Cuts to Come?
New data from the Consumer Price Index (CPI) revealed that in September, inflation had edged up fractionally more than expected. That might throw a wrench in the Federal Reserve’s plan to cut interest rates more this year. Still, most experts think it is more a matter of when and not if the rate cuts will come with some tipping November to be a “pause”.
Second Straight Month Of 0.3% Core Inflation
The Core Inflation rate, which excludes volatile food and energy prices, was up 0.3% in September like a month earlier. That compares with 0.2% expected among Wall Street analysts. The annual core inflation rate climbed to 3.3%, opening up an insoucious high and showing that inflation is taking firm root in key sectors of the economy overall, even if it remains tame at others.
On the other side, overall inflation also increased in March but slightly.
The all-category consumer price index rose 0.2% last month. That was also a tad above expectations, though the annual rate unsubtly fell to 2.4% with compared to 2.5%, the least since February of last year. In recent years, the regime has been shifting to inflation targeting, whereas previously it was fine with letting a little bit of inflation creep in order to push up prices.
The Fed on Inflations Bearing trend
The core CPI is seen as a more accurate reading of underlying U.S. inflation trends and manufacturing costs, by the Federal Reserve. That is a problem, since food and energy prices can be very volatile over the near-term, distorting the overall inflation rate. The numbers have been slightly higher than expected in recent months, although the Federal Reserve is still on track to lower interest rates twice more this year. But the Fed is also unsure if it will hit pause in November to see more data.
Prioritizing The Labor Market Over Inflation
It blames a deteriorating labor market for persistent interest rate cuts and has flagged it will be more worried about rising unemployment than inflation risks. “Federal Reserve officials are currently foreseeing less in the way of inflated inflation risks and do not want to see any further softening in the jobs market,” Citibank economists said.
Social Security Cost-Of-Living Adjustment Up 2.5% For Beneficiaries
Millions of Americans who receive Social Security benefits will see a 2.5% boost in their monthly checks next year in response to inflation This update, called a Cost-of-Living Adjustment (COLA), ensures beneficiaries are able to keep up with the rising cost of goods and services. Even though this rise is on par with the average COLA during the prt 20 years, do not compare this to the 3.2% increase for only 2024 or down from a considerable 8.7% inrease for 2023 following inflation surges because of response to the pandemic.
Conclusion:
At the same time, inflation has remained broadly in line with expectations and the Federal Reserve is still likely to cut interest rate — although it will be more concerned about financial stability. But the uptick in core inflation suggests there are still pockets of pressure be pushed up due to cost increases elsewhere in the economy. You can find other news on inflation and economic trends here at shaktiexpress. com.