HomeFinance NewsEconomyInflation Soars: Despite Government Actions, Prices Skyrocket Again

Inflation Soars: Despite Government Actions, Prices Skyrocket Again


A crucial report Wednesday is expected to show little progress against inflation


Tomorrow’s report on inflation, known as the consumer price index (CPI), is expected to show that prices haven’t fallen as much as hoped.

This is concerning because the Federal Reserve (Fed), which monitors inflation, wants to reduce interest rates to help the economy.

However, if inflation remains high, the Fed may not be able to cut rates.

The CPI measures the overall price of goods and services.

Economists predict that it will show a 0.3% increase from last month, resulting in an annual inflation rate of 3.4%.

This would indicate that prices continue to rise at a higher rate than the Fed’s target of 2%.

Another measure of inflation, known as core inflation, which excludes volatile food and energy prices, is also expected to show an increase of 0.3%.

This would result in an annual rate of 3.7%, suggesting that inflation is not improving as quickly as the Fed hoped.

This report will likely disappoint the Fed and investors, who were hoping for more progress in bringing inflation under control.

As a result, it’s unlikely that the Fed will start cutting interest rates soon.

Important areas to watch in the report include shelter costs, airfares, and vehicle prices, as these have been significant contributors to inflation.

Economists expect a decline in airfares and vehicle prices but a continued rise in housing costs.

Gas prices will also be closely monitored, as they can significantly impact inflation.

Despite remaining relatively unchanged in the past two years, gas prices are still significantly higher than before the pandemic.

Overall, if the CPI report shows that inflation remains persistent, it will be a setback for the Fed’s efforts to bring prices under control.

Consequently, it may delay the Fed’s plan to lower interest rates, which could have implications for the broader economy.

  • Overall sentiment: negative
  • Positive

    “The consumer price index, which measures costs for a wide-ranging basket of goods and services across the $27.4 trillion U.S. economy, is expected to register increases of 0.3% both for the all-items measure as well as the core yardstick that excludes volatile food and energy.”

    “To be sure, inflation has come down dramatically from its peak above 9% in June 2022. The Fed enacted 11 interest rate hikes form March 2022 to July 2023 totaling 5.25 percentage points for its benchmark overnight borrowing rate known as the federal funds rate.”


    “A closely watched Labor Department report due Wednesday is expected to show that not much progress is being made in the battle to bring down inflation.”

    “The report will be released at 8:30 a.m. ET.North said he expects Fed officials to view the report pretty much the same way, backing up comments they’ve been making for weeks that they need more evidence that inflation is convincingly on its way back to 2% before rate cuts can happen.”

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