5 sources·Business

Federal Reserve Faces Inflation Dilemma as October Numbers Rise

The Federal Reserve contemplates interest rates amid rising inflation; core PCE inflation hits 2.8% while consumer spending remains solid.

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Updated: Nov 27th, 2024, 2:40 PM ET

Summary

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In October, inflation rose slightly, prompting the Federal Reserve to reevaluate interest rate cuts. The core PCE index rose to 2.8% annually, while consumer spending and incomes climbed, indicating robust economic activity despite inflation pressures. The Fed's target is 2%, and policymakers face a challenge in balancing growth with inflation control. Current market sentiment anticipates a possible quarter-point rate cut in December, reflecting ongoing debates on managing stubborn inflation and economic stability heading into 2024.

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