Inflation did not rise to what economics have projected for the month of September, with the CPI increasing by only 3% and 3% annually, less than forecasted. The reason why the CPI is important right now is because it is the only economic data allowed to be released during the government shutdown. The data showed that their was moderate price increase in food and energy, while home costs and core services remained contained. A 4.1% jump in gasoline prices was a large contributor with the overall inflation being muted, after a couple months of volatility. Along with this data stock market futures added to gains following the release, while treasury yield were slightly negative.
This CPI report, provides a glimpse into the state of the U.S. economy at a time where other data is suspended. All this data provides the key piece of evidence guiding the feds next move of cutting rates. This has had people concern that the persist of Trump's tariffs could cause another round of painful inflation on our economy causing issues. Overall, the softer inflation right now supports the case for continued monetary easing to sustain economic momentum.
https://www.cnbc.com/2025/10/24/cpi-inflation-september-2025.html
I think that it is positive that the inflation is lower than expected so maybe we are moving in the right direction. It will be interesting to see what decisions are made by the Federal Reserves with this information. I also don't think we have seen the effects of the tariffs yet.
ReplyDeleteI agree. I think it is positive that the inflation is lower than expected and is only one percent more than 2, which is considered to be perfect inflation level. It will be interesting to see how the tariffs affect inflation.
DeleteIt’s encouraging to see inflation holding around 3%, especially given the recent volatility. What stands out is how moderate the increase looks, even with gas prices up 4.1%. That might suggest that underlying inflation pressures might be easing, though it’s still too early to tell how Trump’s tariffs will feed through.
ReplyDeleteInflation staying around 3%, although higher than the targeted 2%, is a testament to the resilience of the U.S. economy. Many economists believed that inflation would come in higher than what the CPI reflected, suggesting a rather good economic performance considering all of the political upheaval in the last few months. It's interesting to see how gas prices have fluctuated lately. Most of this volatility is due to a lack of oil demand and is being reflected in volatile gasoline prices.
ReplyDeleteIt’s good to see that inflation didn’t rise as much as expected, especially with everything going on during the shutdown. The 3% increase shows prices are calmer for now, even though gas costs are still high. It’s kind of a small relief for both consumers and the Fed. But with the uncertainty from tariffs and missing data, it feels like we’re only seeing part of the picture. The next few months will really show if this slowdown in inflation can last.
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