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- 1 While celebrating the anniversary of the Inflation Reduction Act, the US continues to struggle with rising prices.
- 2 The Consumer Price Index (CPI) has shot up straight for the second consecutive month.
- 3 Economists and analysts are speculating on the next move of the Federal Reserve with their insights.
U.S. President Joe Biden recently celebrated the one-year completion of the Inflation Reduction Act. However, the Consumer Price Index (CPI) continued to rise for the second month in a row. As per reports, a rise in the prices of gasoline and household expenses are to be blamed. The news highlights the Federal Reserve’s continued struggle to harness the rising prices.
On the other hand, prices of furniture and used cars are going down. Despite that, rising prices remain a matter of concern, especially when it happens due to oil. The precise rate at which prices increased monthly is 0.6%. In July, it was just 0.2% but it took a bigger jump this month. In every instance, gas and petroleum products are the culprits.
Are the Feds Keeping An Eye On CPI and Core Inflation?
Notably, the core prices exclude volatile food and energy items. They are the items that the Fed oversees. Still, they jumped with a 0.3% hike. While most economists expected the continued rate of 0.2%, the heightened rise is still lesser than July’s. It reached 4.7% from 4.3% between July to September. Jason Schenker, the president of Prestige Economics said that inflation is not in control yet.
Will Inflation Reduce?
Inflation touched a 40-year high when it touched 9.0% in June 2022. Although the Feds are making efforts, it may still be difficult to meet the target of 2%. Moreover, there’s a good reason behind the fall in the prices of the goods. The price of those items spiked when their supplies hit a roadblock during the pandemic. Currently, the supply channels are up and running again. As a result, the cost of all those goods are coming down.
Will The Feds Up the Interest Rate in September?
Barclays believes that the Feds will hike the interest rate again. They’re predicting it to lift by 5.25 points in 16 months. It would make the current inflation-countering campaign the biggest in four decades. Still, some don’t think the Feds will act as per Wednesday’s report. Chief economist Kathy Bostjancic says that it’s not enough for the body to deviate from its course.
She believes that the government experts may postpone this action while observing the markets for this duration. Many others think that the Feds will probably sit this one out. Advisors at Capital Economics and Pantheon Macroeconomics say that there are other factors at play here. According to them, the job market, a slowing economy, and decreased rent increases will control inflation. However, the consumers will continue to suffer in this period. Lately, the wage growth started outrunning inflation. Nonetheless, not many Americans are feeling its impact.
Upshot
Thus, the uncertainty looms large over the US right now. The citizens are expecting some relief and expecting the government to take some measures. Nevertheless, it is to be seen if people will see some changes in prices in the coming months. Hopefully, US citizens will overcome this challenge too.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
