Institution: The overall and core CPI annual rates in the US for September may both approach 3%, and the direction of inflation changes could cause concern for the Federal Reserve.
BlockBeats News, October 23, Dean Baker, Chief Economist at the UK research institute CEPR, stated that the US September CPI data is likely to show a growth rate similar to that of August. The energy component rose by 0.7% in August, and September may also show a rapid growth rate. The household food component increased by 0.6% in August, and the growth in September may slow down. The core CPI monthly rate for September is very likely to reach 0.3% again, which may be rounded to 0.4%.
In addition, both the overall and core CPI annual rates for September are likely to be close to 3.0%, which is exactly one percentage point higher than the Federal Reserve's 2.0% target. For the Federal Reserve, the level of inflation may be less concerning than the direction of its change. At least until the full impact of tariffs is passed on to consumers, the inflation rate is more likely to rise rather than fall. If new tariffs are implemented and the impact spreads to more industries, the issue will become even more complicated. Unless there is a significant economic recession, it is difficult to imagine a scenario where inflation can reach the Federal Reserve's target in the short term. (Golden Ten Data)
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