According to Kathy Bostjancic, the chief economist for Nationwide Mutual, the recent inflation report keeps the possibility of another rate hike later this year alive. However, she notes that there is a high hurdle to actually follow through with another rate move.
The strength of the job market and the declining inflation rate over the summer have increased the threshold for raising borrowing costs. Federal Reserve Chair Jerome H. Powell has shifted his tone since July, indicating that further rate increases will only occur if appropriate.
The Federal Reserve has two more meetings scheduled after the September gathering, with policy votes taking place in November and December. One more Consumer Price Index inflation report will be released before the November meeting, which will provide further insight into inflation trends.
Factors such as new data, methodological changes, and fluctuations in consumer demand could impact inflation in the coming months. However, it is expected that inflation will continue to slow down, aligning with the Federal Reserve’s objective of achieving disinflation.