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Inflation has cooled to its lowest level in three years but remains above the Federal Reserve’s 2% target rate ahead of planned rate cuts.
That’s according to the latest report from the Labor Department. It showed the Consumer Price Index rose 2.5% on an annual basis, marking the lowest increase since February 2021.
However, core inflation, which doesn’t factor in food and energy prices, is stickier, clocking in at 3.2%.
On the whole, it’s welcome news for the Federal Reserve which plans to cut interest rates next week. According to the Washington Examiner, some expect a standard 0.25-percentage point cut, while others believe it could be as much as half a point.
Interest rates currently sit at a two-decade high.