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Fed Approaches 2% Target for Inflation Rate
The latest data on inflation, including a producer-price index (PPI) that was unchanged from September, suggest that the Federal Reserve is near its 2% target for inflation, CNBC reported Friday. The PPI reading followed a decline in the consumer price index to 2.4%, the lowest rate of increase since February 2021.
In fact, the Fed may already be there, reported CNBC. Goldman Sachs economists on Friday projected that the personal consumption expenditures price index for September will show a 12-month inflation rate of 2.04% when released later this month.
“If Goldman is correct, that number would get rounded down to 2% and be right in line with the Fed’s long-held objective, a little over two years after inflation spiked to a 40-year high and unleashed an aggressive round of interest rate hikes,” CNBC reported. The PCE is the Fed’s preferred measure of inflation, although it uses a variety of inputs in its decision-making.
- ◦Economy
