The latest inflation data is expected to show that price gains moderated further in August, easing the pressure on households and the Biden administration as falling gas prices paved the way to less financial pain.
The expected cool down is not enough for policymakers at the Federal Reserve, who have been raising interest rates to slow the economy and try to tame recent rapid inflation.
Consumer prices are expected to rise 8 percent from a year earlier, still a rapid pace of increase, but a slower rate than in July and June, according to economists. Economists project that core inflation increased in August. The measure strips out volatile food and fuel prices to give a better sense of underlying trends.
In the year through August, the core gauge is expected to increase by 6.1 percent. August price gains are being measured against a weak reading from the same month in the past. Inflation tends to appear faster when it's measured against a base number.
August numbers will be a subtle reminder that we are not out of the woods yet.
The Fed is likely to keep fighting inflation. Central bankers are waiting for a sustained slowdown in price increases to convince them that their policies are working to cool demand and nudging the economy back towards a healthy environment in which inflation is slow, steady and barely noticeable Officials have pledged to keep raising interest rates until that happens.
Officials are expected to raise the interest rate by three quarters of a point when they meet next week. Policymakers hope to slow the pace of rate moves eventually, but they say the timing will depend on incoming data
Christopher Waller, a Fed governor, said last week that inflation is too high and it is too soon to say whether it is moving meaningfully and persistently downward. We will not walk away from this battle.
All Rights Reserved © 2024
