Inflation Cooled in August: What It Means for the Fed's Next Rate Cut
Posted by Michael Perna on
August brought welcome news on the inflation front, with the Consumer Price Index (CPI) continuing its decline, hitting a three-year low. Inflation cooled to 2.5%, down from July’s 2.9% and dramatically lower than its 9.1% peak in 2022. This deceleration has led to widespread speculation that the Federal Reserve is prepared to cut interest rates for the first time since 2020 at their upcoming meeting.
However, signs of economic stubbornness remain, as core inflation, which excludes volatile food and fuel prices, ticked up slightly by 0.3%. Notably, housing costs proved more resistant to the downward trend, raising concerns that inflation might not fully align with the Fed’s 2% target. Despite this, the overall narrative of a gradual cooling inflation…
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