The US economy continues to grapple with inflation as the Consumer Price Index (CPI) saw a year-on-year rise of 3.7% in September, slightly outpacing the projected 3.6%. This figure mirrors the growth observed in August. The core measure, which excludes volatile food and fuel costs, climbed by 4.1%, meeting expectations and marking a slight decrease from the previous 4.3% recorded.
Despite the slowdown in inflation compared to 2022 and earlier this year, there are signs that this deceleration may be reaching a plateau. As part of its strategy to manage inflation and moderate economic growth, the Federal Reserve has been gradually raising interest rates, pushing borrowing costs to between 5.25-5.5%, a considerable increase from near-zero levels just 19 months ago.
The Federal Reserve's next meeting is scheduled for Oct. 31 and Nov. 1, with policymakers considering another rate hike. Omair Sharif, founder of Inflation Insights, raised concerns about unexpected upward trends in several categories.
Wall Street is forecasting another rate increase in December. Meanwhile, Social Security benefits are expected to rise by 3.2% in 2023, following a record-setting increase of 8.7% in the same year.
Federal Reserve Governor Christopher J. Waller emphasized the need for patience and careful observation as the yield on the 10-year Treasury bond has seen a sharp rise in recent weeks.
Major corporations such as The Walt Disney Company (NYSE:DIS), PepsiCo (NASDAQ:PEP), and Chipotle (NYSE:CMG) continue to announce price increases. Despite these challenges, strong hiring trends have been reported in the economy. The Personal Consumption Expenditures index, used by Federal Reserve officials to establish their 2% inflation target over time, also remains a key metric to watch.
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