US wholesale inflation rose a hotter-than-expected 0.7% in August, triggered by a 10.5% surge in energy costs and a staggering 20% jump in gasoline prices.
In densely-populated, inflation-ridden metros like San Francisco and New York,Economists are predicting that the slight increase in core inflation over the past three months sets up the Fed to hold interest rates steady next week following the central bankers’ highly-anticipated two-day meeting set for Sept. 19 and 20.
All eyes are now on Fed officials, who are set to meet later this month to decide whether or not to raise its benchmark federal funds rate beyond the 22-year high it’s currently at.Whether Fed officials will raise its benchmark federal funds rate beyond its current range — between 5.25% and 5.5% — in November and December still remains up in the air. Fed Chair Jerome Powell was hawkish in his tone on the still-stubbornly high inflation, though he remained vague on future rate hikes.
“We are navigating by the stars in cloudy skies,” Powell said from Jackson Lake Lodge, noting that Fed officials “will keep at it until the job is done” and the Fed’s 2% inflation goal is reached. The central bank has worked to bring down stubbornly high inflation by hiking rates another 25 basis points to a 22-year high last month in hopes of an economic slowdown.
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