Fed forced to confront case for bigger and faster rate rises
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Federal Reserve officials now face pressure for faster rate hikes after inflation data showed a sharp rise through October.
- ✓Core prices jumped, forcing the bank to reconsider its strategy for the December 8-9 meeting.
- ✓Economist Tiffany Wilding said, "This still doesn't look like a replay of 2022," despite rising costs.
Story at a Glance
- Category
- Indian Markets
- Reported By
- mint
- Reading Speed
- 7 Minute(s)
- Market Focus
- India Economy
Summary
A third straight month of firm underlying inflation reopens the question of how far and how fast the central bank must go.
Federal Reserve officials spent October talking markets down from bets on a quick string of rate increases. Inflation data haven't cooperated.
Core consumer prices, which exclude food and energy, rose at a 3.7% annualized rate over the three months through October, a broad acceleration from the 1.6% rate for the three months through July, according to a Labor Department report released Tuesday.
The figures left little doubt that the Fed will raise rates at its Dec. 8-9 meeting. The bigger questions are how quickly the central bank should move and whether it is still making the modest adjustment of two or three increases that many officials have envisioned or is instead at the start of a longer campaign to slow the economy and bring down inflation.
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