Inflation Likely Stayed Slightly Too Hot For Comfort In October | Global News Avenue

Inflation, the economic force that helped push Democrats out of the White House, is forecast to remain disturbingly high in October.

According to a Bloomberg Finance survey of economists, a report released by the U.S. Bureau of Labor Statistics on Thursday is likely to show that the consumer price index rose 2.6% year-on-year in October, up from 2.4% in September. “Core” inflation, which excludes food and energy price swings, was likely to remain at 3.3%, unchanged from September.

Both rates are above the 2% annual interest rate target of the Federal Reserve, which sets the country’s monetary policy with the goal of keeping price increases stable. Inflation has fallen sharply from its peak in mid-2022, when CPI hit its highest level in more than 40 years.

Remaining inflation could also keep borrowing costs higher for longer. Fed officials have influence federal funds rate Interest rates were at two-decade highs through September and are designed to tame inflation by keeping borrowing costs higher for all types of loans. exist The last two meetings of the Federal Reserve Policy Committeecentral bankers lowered interest rates, believing inflation was moving toward their 2% target.

Stubborn inflation could push interest rates higher

However, stubborn inflation may allow the Fed to delay further rate cuts.

Core inflation is expected to rise 0.3% from September, marking the fourth month that the rate has risen or remained unchanged rather than fallen.

“Core inflation has failed to improve for four straight months,” Brean Capital Markets economists John Ryding and Conrad DeQuadros wrote in a commentary. Slowing down. “Another increase of this magnitude will pose a challenge for the Fed to cut interest rates at its December meeting.”

The path of inflation has political and economic implications. Voters angry about rising prices under Biden, according to exit polls is a key factor President-elect Donald Trump won on Tuesday.