Inflation Indicator Eases Path to Interest Rate Cut
Prices Rose 0.3% in September From August, the Same as the Previous Month
[Stay on top of transportation news: .]
WASHINGTONÌý — The Federal Reserve’s preferred measure of inflation slowed a bit in September, likely easing the way to a widely expected interest rate cut by the central bank next week.
Prices rose 0.3% in September from August, the Commerce Department said Dec. 5, the same as the previous month.
Excluding the volatile food and energy categories, core prices rose 0.2% in September from August, the same as the previous month and a pace that if it continued for a year would bring inflation closer to the Fed’s 2% target.
Compared with a year ago, overall prices rose 2.8%, up slightly from 2.7% in August. Core prices also rose 2.8% from a year earlier, a small decline from the previous month’s figure of 2.9%.
Want more news? Listen to today's daily briefing above or go here for more info
The data, which was delayed for five weeks by the government shutdown, shows that inflation was muted in September and will bolster the case for a cut to the Fed’s key interest rate at its next meeting Dec. 9-10. Inflation remains above the central bank’s 2% target, partly because of President Donald Trump’s tariffs, but many Fed officials argue that weak hiring, modest economic growth, and slowing wage gains will steadily reduce price gains in the coming months.
The Fed is facing a tricky decision next week: It would typically keep rates high to fight inflation. At the same time, it is worried about weak hiring and a slowly rising unemployment rate. It hopes that reducing rates will spur more borrowing and boost the economy.
