HomeFinancial MarketsInflation Uptick Will Not Affect Fed Policy, Economists Claim

Inflation Uptick Will Not Affect Fed Policy, Economists Claim

Economists are broadly of the opinion that the recent rise in consumer prices will not affect the Federal Reserve’s upcoming interest rate decision at its policy meeting next week. The Consumer Price Index released on Wednesday showed that inflation had risen higher compared to the previous year than analysts expected.

Month-over-month CPI in August grew at a rate of 0.2%, while year-over-year inflation rose by 3.6%, significantly higher than the 3.2% growth expected by analysts. Stocks rose after the release of this data, with the S&P 500 and the Nasdaq Composite rising by 0.3% each while the Dow Jones Industrial Average rose by 0.2%.

The CME FedWatch Tool expects there to be a 97% probability that the Federal Reserve will pause its interest rate hikes in September, up from a previous 92% probability.

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