Inflation Drops Near Fed Target

Inflation Drops to 3.3% as Fed Weighs Interest Rates Amid Rising Oil Prices

The Federal Reserve is expected to decide on whether to raise its short-term interest rate next week, following a period of rising oil prices and rising interest rates. The government is expected that headline inflation fell to 3.3% from 3.4%, still above the Fed's 2% target. Meanwhile, longer-term rates rose due to fears of higher inflation, leading to higher mortgage borrowing costs. The Trump administration is trying to counter concerns about high prices and increasing interest rates ahead of the midterm elections. However, the yield on the 10-year Treasury reached a nearly three-year high. Despite this, inflation may not affect consumers or the Federal Reserve, as core prices are projected to have risen by just 0.2% from July to August and 2.4% from a year earlier.

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