Even a Cooler Inflation Report May Not Be Enough to Keep the Fed From Raising Rates Next Week
Economists say a 0.3% core reading could strengthen the case for a 25-basis-point hike, while 0.1% would favor holding rates.
- The consumer price index report due Friday is poised to determine whether Federal Reserve policymakers lift rates next week, with officials emphasizing they need reassurance underlying inflation is on track to reach the 2% goal.
- Persistent inflation stems from multiple sources, including Middle East tensions pushing oil prices above $100 a barrel and ongoing trade tariffs that complicate the Fed's traditional monetary policy tools. Energy costs rose 4.2% in August.
- Thursday's Labor Department data showed the producer price index accelerated to 5.4% from 4.8% annually in August, driven by energy pressures. This wholesale inflation reading highlights broad price pressures officials are monitoring.
- Markets now price in about 70% odds of a rate hike at the Sept. 15-16 gathering, according to futures contracts. Fed Governor Christopher Waller said he would consider a hike "if inflation comes in hot."
- The Fed maintains its benchmark rate at 3.50%-3.75% as it navigates a "narrow path" between restraining inflation and supporting growth. Economists expect annual headline inflation around 3.4% and core inflation near 2.4%, providing critical data for next week's policy vote.
25 Articles
25 Articles
Even a cooler inflation report may not be enough to keep the Fed from raising rates next week
By Elisabeth Buchwald, CNN (CNN) — Americans have already been feeling the pain at the gas pump as the war with Iran has pushed up prices to record highs for this time of year. But the bigger concern is what happens next. Persistently higher energy prices – especially for diesel – could continue to push
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rtl.luUS braces for inflation report that may push Fed to hike rates
Consumer prices have risen since US-Israel strikes on Iran began in late February. (EPA Images pic)WASHINGTON: A consumer inflation report due Friday could pave the way towards the US central bank's first interest rate hike in more than three years, as the war with Iran drives energy costs higher.After data this week showed an uptick in wholesale inflation, all eyes are turning to the Labor Department's consumer price index (CPI) report for deta…
What a Fed rate hike actually means for the U.S. economy and inflation
Federal Reserve officials have signaled they’re prepared to raise interest rates if inflation doesn’t improve soon, but they may find their main policy tool will do little to restrain some of the forces pushing up prices now. The consumer price index report due Friday is poised to determine whether policymakers will lift rates next week, with officials emphasizing they need reassurance ...
Tomorrow's CPI Report Could Send Rate-Hike Odds Even Higher
The Federal Reserve has a narrow path to walk. Inflation remains above its 2% target, oil prices have climbed amid renewed tensions in the Middle East, and an August jobs report showing 162,000 new positions gave policymakers less reason to worry about a weakening economy. At the same time, inflation has cooled from its 2026 […]
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