Inflation drops to 2.5%, signals chapter closing in economic battle
We are closing the chapter on inflation, announced the Chief Economic Advisor to the White House, Lael Brainard, after the publication of data showing that the Consumer Price Index (CPI) was 2.5% in August. The economy is one of the key topics in the ongoing campaign in the USA.
The White House's chief economic advisor, Lael Brainard, stated in a communication, "We are closing the chapter on inflation. " This was after data showing that the Consumer Price Index (CPI) was 2.5% in August. Economic issues, especially inflation, are crucial topics in the ongoing presidential campaign in the USA.
The CPI level of 2.5% surprised some analysts who expected a result of 2.6%. In July, the index was 2.9%, meaning the current level of CPI inflation is the lowest since 2021, the US Department of Labor reported.
Inflation is a key topic in the presidential campaign in the USA
According to a survey conducted for 'The New York Times', the economy is considered the most important issue in the campaign by most Americans.
The latest CPI results show that inflation is behaving in line with the predictions of the US Federal Reserve (Fed), which will meet on September 18 at 2:00 PM ET. Fed Chairman Jerome Powell previously suggested that interest rates might be cut at the upcoming meeting.
What's next for interest rates?
It is not yet clear to what extent interest rates will be cut, as the Fed bases its decisions on another indicator, partially derived from CPI data but published later.
According to "NYT", wages have been rising faster than prices for over a year, which may be satisfying for President Joe Biden's administration, which has so far struggled to show an improvement in the economic situation in the USA.
The Fed raised interest rates during the COVID-19 pandemic to combat rising prices. Many business owners are eagerly awaiting a rate cut, as it would enable companies to take out cheaper loans from banks.
