Fed rate hike call seen tight as inflation heats up
A Federal Reserve interest-rate decision later this month may be a closer call than previously thought after Labor Department data showed consumer prices were up 3.7 percent last month from a year earlier, well above the Fed's 2 percent target and moving in the wrong direction. Higher gasoline prices from the Middle East war were a main driver. Excluding volatile food and energy prices, the core…
The Federal Reserve's upcoming interest-rate decision may be more challenging than anticipated, following Labor Department data revealing a significant surge in consumer prices. The August report showed inflation at 3.7 percent year-over-year, surpassing the Fed's 2 percent target and moving in the wrong direction. The primary culprit behind this surge was the escalation in gasoline prices due to the ongoing conflict in the Middle East.
When volatile food and energy prices are excluded, the core Consumer Price Index (CPI) rose by 2.6 percent, exceeding economists' projections of 2.5 percent.
The Federal Reserve raised interest rates to a target range of 3.75 percent-4.00 percent in September, aiming to curb the overheated inflation. Officials have remained vigilant for indications of persistent price pressures that could maintain inflation at elevated levels, even if gas prices stabilize or decline. The data released on Wednesday provided ample evidence of this concern, with no single component driving the increase.
Instead, the surge appeared broad-based, encompassing a variety of components showing strength, as noted by Omair Sharif, founder of Inflation.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- US inflation heats up in September; Fed rate hike this month back on table channelnewsasia.com
- US inflation heats up in September; Fed rate hike this month back on table brecorder.com
- Fed rate hike call seen tight as inflation heats up koreatimes.co.kr
