The Federal Reserve gets fresh insight into its inflation challenge this week amid expectations US prices continued to rise at a stubbornly fast pace in the past month.
The consumer price index report for October is scheduled for Thursday, and is set to have climbed 7.9% from a year ago, only a slight slowing from 8.2% recorded in September, according to the median forecast of economists surveyed by Bloomberg News.
Strip out food and energy and the index likely edged down to a 6.5% result from September’s 6.6% advance. That’s still far above the 2% inflation the Fed targets based on a separate gauge.
On a month-over-month basis, the core measure is projected to rise 0.5%, matching the average pace since October of last year and indicating the Fed has made little progress arresting rampant inflation with its series of jumbo rate hikes.
US Inflation Continues to Ramble On | October price report projected to show Fed that pressures persist
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Fed officials, led by Chair Jerome Powell, raised their key interest rate on Nov. 2 by 75 basis points for the fourth meeting in a row.
While they hinted at a potential willingness to slow the pace of increases when they next gather in December, that will ultimately depend on whether the outlook for inflation cools. Policy makers are already signaling that rates may peak at a higher level than previously assumed.
According to Bloomberg Economics: “On the surface, the core reading, which excludes food and energy, should contain some good inflation news for Fed doves. Price pressures in both core goods and services will likely moderate.”
The inflation surge certainly has implications for lawmakers as US voters go to the polls on Tuesday. Opinion polls suggest Democrats will lose control of the House of Representatives and possibly the Senate as well.
