Inflation Cooled in August, Keeping the Fed Poised to Cut Rates

Published On Sep 11, 2024, 5:03 AM

The latest report on inflation shows that the Consumer Price Index (CPI) rose by 2.5% in August from the previous year, which is a decrease from July's 2.9%. This marks the lowest inflation rate in three years, creating an opportunity for the Federal Reserve to potentially lower interest rates for the first time since early 2020. However, underneath this positive trend, core inflation — which excludes food and fuel costs — increased by 0.3%, indicating persistent inflationary pressures, especially from housing costs. These factors suggest a cautious approach from the Fed in balancing inflation control with economic sustainability.