Although the latest figures presented by the Bureau of Labor Statistics showed an increase in inflation from 3.2% in July to 3.7% in Augustsome economists assure that the inflation rate will continue to slow in the coming months.
From its all-time high of 9.1% last year, inflation has cooled at a slow but steady pace; Federal Reserve policymakers have acted quickly to bring it to the 2% target through raising interest rates a measure to curb consumption among Americans.
For Jose Torres, senior economist at Interactive Brokers, “Right now, we are seeing weakening price momentum in general goods, particularly in used cars, but we are also seeing a slowdown in new vehicle prices, and we believe prices will continue to decline through the end of the year.” she said.
The August figures were driven in part by the high price of gasoline, the Consumer Price Index increased 0.6%; however, Core inflation slowed from 4.7% in July to 4.3% in August. These data are leading many specialists to anticipate a slowdown in inflation for the following months.
Sarah House, senior economist at Wells Fargo added that “We’ve seen rental costs slow down quite a bit over the past year. “We are seeing single-family rentals moderate quite a bit as well, and as that begins to be reflected in official inflation measures, we are of the view that there will be a lot more weakness in that sector,” he said.
For their part, another group of experts point out that the Fed will pause raising interest rates this year for a second time, which are currently in the 5.50% range, all due to the latest economic data.
Economists at Goldman Sachs highlighted in their report that “in November, we believe that further labor market rebalancing, better news on inflation and the likely slowdown in fourth-quarter growth will convince more participants that the FOMC (Federal Management Committee Open market) may forego a final raise this year, as we assume ultimately.”
However, Federal Reserve Chairman Jerome Powell has anticipated about two more interest rate hikes this year. In this regard, Jim Baird, CEO of Plante Moran Financial Advisors, expressed that “if another increase could be on the table at the end of this year will depend on the tone of incoming data in the coming months“, said.
Source: La Opinion