The Fed’s Preferred Inflation Gauge Cooled Overall in September

Published On Oct 31, 2024, 8:47 AM

Inflation has continued to cool, with overall prices rising only 2.1% year-over-year in September, nearing the Federal Reserve’s 2% target. However, core inflation, which excludes food and fuel, increased 2.7% compared to the previous year, indicating persistent inflationary pressures. While this shows progress, analysts suggest the Fed may remain cautious and consider further actions in response to ongoing inflation concerns, particularly as interest rates have recently been cut for the first time in four years.

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The inflation report indicates mixed signals for the economy, suggesting cautious optimism. If the inflation trend continues to cool, it may bolster investor sentiment in the equity market, particularly in sectors sensitive to interest rates. Companies that thrive in a low-interest-rate environment might see increased demand and profitability.

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