Fed could slow rate hikes in the US due to inflation

Historical inflation in the United States took a breather in October and fell to 7.7% annually from 8.2% the previous month, thus opening the door to Federal Reserve (Fed) to ease the pace of interest rate increases by the end of the year.

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This is the fall of inflation is “the most pronounced” of the main economy in the world in the last four measurements of the statistical office, which may indicate that the ‘inflationary peak’ has already occurred.

However, in terms of core inflation, that which excludes food and energy also registered a small fall from the previous 6.6% in September to the current 6.3%. This was revealed this Thursday by the Bureau of Labor Statistics (BLS, for its acronym in English).

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In monthly terms, the CPI for Americans increased by 0.4%same record of the previous month, being driven by more than half of the data, by the housing category (0.8%), energy (1.8%) and food (0.6%).

On the other hand, the records that decreased during this month were energy services (-1.2%); domestic gas (-4.6%) and used vehicles (-2.7%).

In this regard, Ian Shepherdson, chief economist at Pantheon Macroeconomics, pointed out that the consultancy expects “another decent record” in November, which is published two days before the meeting of the Federal Reserve Committee.

“This gives the Fed room to only increase 25 basis points, provided that the employment and wage figures also soften.”, said the economist.

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On the other hand, Edward Moya, senior market economist for the Americas at the consultancy Oanda, mentioned that this November data “is a good sign” that “the Fed is on the right track”, but “there are still many variables” in the air.

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