Core US inflation hits 40-year high

Inflation in the US rose above expectations and detailed data from the index report revealed that rising prices are resisting the Fed’s policy of raising interest rates (Federal Reserve, the US central bank).

The consumer price index rose 0.4% last month after rising 0.1% in August, the Labor Department said on Thursday. The market expected a rise of 0.2%, according to a Reuters survey.

In the 12 months through September, the index rose 8.2%, after rising 8.3% in August. On an annual basis, the index peaked at 9.1% in June, which was the biggest increase since November 1981.

The most worrying data, however, is the so-called core inflation, which excludes volatile prices, such as energy and food.

This indicator gained 6.6% in September over the previous year, accelerating from 6.3% in August and marking the biggest increase since August 1982. Compared to the previous month, the core index rose 0.6% in September, the same as in August.

“The cores rose more than expected, indicating that the surprise was not concentrated in food and fuel. It was expected an acceleration of the core from 6.3% to 6.5%, but the index reached 6.6%”, he commented. economist Étore Sanchez, from Ativa Investimentos.

Investors and Fed officials closely monitor core inflation because it is considered the most reliable data for assessing the country’s future inflation.

“Inflation picked up a lot of momentum last year,” Bill Adams, chief economist at Comerica Bank, told The Wall Street Journal. “This will keep inflation higher than the Federal Reserve wants for at least a few more months – if not a few more quarters.”

In light of this, expectations are reinforced that the Fed will adopt a fourth interest rate hike of 0.75 percentage points next month.

On Wednesday (12), authorities responsible for the policy of controlling inflation in the United States consider that it is necessary to continue raising interest rates to stop the rise in prices, according to the minutes released this Wednesday of the last meeting of the Fomc, the open market committee. of the Federal

At last month’s meeting, the Fed raised interest rates by 0.75 percentage points for the third time in an effort to reduce the highest inflation in 40 years.

Fomc projections released with the minutes show that the basic interest rate, currently in the range of 3% to 3.25%, will rise to the range of 4.25% to 4.50% by the end of this year.