The new inflation report is out, and it's likely to make the Federal Reserve pretty happy: It cooled down last month in a sign that the Fed's interest rate hikes are having the desired effect, per the AP.
- Key numbers: Tuesday's report from the Labor Department showed that lower gas prices helped cool overall inflation, which was unchanged from September to October and down from the 0.4% jump the previous month. (Economists had expected it to rise slightly, notes the Wall Street Journal.) Compared with a year ago, consumer prices rose 3.2% in October, down from 3.7% in September. The Fed's target is 2%.
- Core prices: Excluding volatile food and energy prices, so-called core prices also weakened unexpectedly. They rose just 0.2% from September to October, slightly below the pace of the previous two months. Economists closely track core prices, which are thought to provide a good sign of inflation's future path. Measured year over year, core prices rose 4% in October, down from 4.1% in September.
The latest price figures arrive as Fed officials, led by Chair Jerome Powell, are considering whether their benchmark interest rate is high enough to quell inflation or if they need to impose another rate hike in coming months. Powell said last week that Fed officials were "not confident" that rates were high enough to tame inflation. Tuesday numbers boosted hopes on Wall Street that the Fed may be able to avoid another hike: Dow futures rose more than 300 points in the wake of the report, notes CNBC. (More inflation stories.)
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