U.S. consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years, potentially keeping the Federal Reserve on track to cut interest rates again next month. The consumer price index increased 0.2% last month after gaining 0.2% in August, the Labor Department's Bureau of Labor Statistics said on Thursday. In the 12 months through September, the CPI climbed 2.4%. That was the smallest year-on-year rise since February 2021 and followed a 2.5% advance in August.
Economists polled by Reuters had forecast the CPI edging up 0.1% and rising 2.3% year-on-year. The annual increase in inflation has slowed from a peak of 9.1% in June 2022. Together with a significant moderation in the inflation measures tracked by the U.S. central bank for its 2% target, that allowed the Fed to shift focus to the labor market and deliver an unusually large 50 basis points rate cut in September. Minutes of that meeting published on Wednesday showed a "substantial majority" of policymakers supported beginning an era of easier monetary policy, but there appeared even broader agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future.
Source: Reuters