Federal Reserve’s preferred inflation gauge shows price pressures continuing to cool

 The preferred inflation gauge of the Federal Reserve was steady, indicating a reduction in price pressure. Consumer prices increased by 3% in October, down from 3.4% in September. This indicates that the benchmark rate will probably remain steady at the next Fed meeting. Grocery prices have increased slightly, although overall inflation is declining and is in line with the Fed's objectives. It is anticipated that high borrowing prices will impede US economic growth, tempering the 5.2% recorded. The drop in spending, especially when it comes to credit-based goods like furniture and cars, suggests that the Federal Reserve's rate hikes are having an impact on consumer behavior and may even result in price reductions. As indicated by a prominent official, the Fed, which has raised rates eleven times since March 2022, would contemplate lowering rates by spring if inflation keeps declining. 

The post-pandemic general price level is still much higher, despite a slowdown in inflation, which has an impact on Americans' economic prospects. Because the PCE index takes inflation-related changes in consumer purchasing behavior into account, the Fed supports it. It takes into consideration the switch from pricey national brands to more reasonably priced store brands.

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