US Inflation Eases to 2.7% in September, Strengthening Fed Cut Bets
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US consumer inflation cooled more than expected in September, reinforcing expectations that the Federal Reserve may soon begin lowering interest rates. The Consumer Price Index rose 2.7% from a year earlier, down from 2.9% in August and below economists’ forecast of 2.8%, according to the latest data.
On a monthly basis, price pressures also appeared more contained, suggesting that the recent disinflation trend remains intact. The softer reading adds to evidence that inflation is gradually moving closer to the Fed’s long-term target, even as policymakers continue to monitor the pace of progress.
Core CPI, which excludes the often-volatile food and energy categories, increased 3.3% year over year in September. That was also slightly below market expectations, indicating that underlying inflation is easing as well.
The report is likely to support market expectations for a 25-basis-point rate cut at the Federal Reserve’s November meeting. Investors have been watching inflation closely for signs that the central bank has enough room to shift toward a more accommodative stance after an extended period of restrictive policy. While inflation remains above the Fed’s 2% target, the latest figures suggest price growth is moderating at a pace that could give officials more confidence to ease policy later this year.
