Ahead of a crucial Federal Reserve meeting where it will decide whether to lower or retain interest rates, US inflation increased in August at its strongest rate since the start of the year.
According to the most recent data from the US Labor Department, consumer prices grew 2.9% in the year to August, up from 2.7% the month before. Rising prices for household furniture, autos, and basic groceries like beef and tomatoes caused this increase.
Since last year, the US central bank has maintained interest rate stability as decision-makers have continued to assess how President Donald Trump’s import tariffs are affecting consumer prices. It is generally anticipated that the Fed will lower interest rates by a quarter of a percentage point the following week.
Although it is unclear that the latest statistics would change those projections, the increase in inflation is likely to keep policymakers cautious as they consider rate reduction in the coming months.
According to US economist Atakan Bakiskan of banking firm Berenberg, “President Donald Trump’s inflationary policies, tariffs and restrictive immigration measures are gradually showing up in the hard data and continue to erode consumers’ purchasing power.”Trump has brushed off worries that his initiatives may hurt the economy or raise prices.
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