WASHINGTON (AP) — A measure of inflation that is closely monitored by the Federal Reserve eased but remained at an elevated level in October, likely reinforcing the Fed‘s intent to keep raising interest rates to cool the economy and slow the acceleration of prices.
Thursday’s report from the Commerce Department showed that prices rose 6% in October from a year earlier. That was down from 6.3% year-over-year increase in September.
Excluding volatile food and energy prices, so-called core inflation over the previous 12 months was 5%, less than the 5.2% annual increase in September.
Responding to the worst inflation bout since the early 1980s, the Fed has raised its benchmark rate six times since March, and its past four hikes have each been by a hefty three-quarters of a point. The central bank is hoping to engineer the difficult task of bringing inflation down to its 2% annual target without causing a recession in the process.
On Wednesday, Fed Chair Jerome Powell said in a speech that the central bank could slow its rate hikes to a half-point increase when it next meets in two weeks — a message that sent cheers through the financial markets. Yet at the same time, Powell made clear that the policymakers intend to keep their key rate, which affects many consumer and business loans, at a high level for a prolonged period.
Copyright © 2023 The Washington Times, LLC.