US inflation lowest in more than 3 years

Annual inflation in the US recorded its lowest level in more than 3 years. (Photo: AFP)

Specifically, the US CPI in September increased by 0.2% compared to the previous month. Compared to the same period last year, the CPI increased by 2.4%, the lowest increase since February 2021, after increasing by 2.5% in August.

Core inflation, which excludes volatile food and energy prices, rose 0.3% in September from the previous month and 3.3% from a year earlier.

The annual rate of US inflation has slowed significantly, along with adjustments in the US Central Bank's inflation control measures, allowing the Fed to shift its focus to the labor market and continue to promote looser monetary policy.

Minutes of the Fed's policy meeting released on October 9 showed that a majority of policymakers supported the start of a period of loose monetary policy. The resilience of the labor market and solid consumer spending forced investors not to expect the Fed to cut interest rates by another 0.5% next month.

Fed officials have grown increasingly confident that inflation is moving toward their 2% target while still expressing some concerns about the state of the labor market.

The Fed's first rate cut since 2020 lowered the central bank's policy rate to a range of 4.75%-5%. The Fed raised rates by 5.25% in 2022 and 2023.

According to CME Group's FedWatch Tool, financial markets are currently predicting a 76% chance that the Fed will cut interest rates by another 0.25% at its policy meeting on November 6-7, while the chance of rates remaining unchanged is only about 24%.

Previously, on September 18, at the end of a two-day meeting, the Federal Open Market Committee (FOMC), the FED's policy-making body, decided to cut interest rates by 0.5%, starting a cycle of easing monetary policy, in the context of gradually cooling inflation and increasing concerns about the health of the labor market.

This is the first interest rate cut by the FED since March 2020. In a statement after the policy meeting, the US Central Bank said that although inflation remains high, policymakers decided to cut interest rates from a 23-year high of 5.25 - 5.5% to a range of 4.75 - 5% based on developments in inflation and when risks have been balanced. US inflation fell to 2.5% in August, from a peak of 9.1% recorded in mid-2022./.

Source: https://dangcongsan.vn/the-gioi/tin-tuc/lam-phat-tai-my-thap-nhat-trong-hon-3-nam-680420.html