National economy Inflation in the USA falls ahead of interest rate decision

Inflation in the USA slowed significantly in August. Consumer prices rose by 2.5 percent compared to the same month last year, according to the US Department of Labor in Washington.

The inflation rate is the lowest since February 2021. In the previous month, the rate had been significantly higher at 2.9%. Economists had expected the rate to fall on average.

Compared to the previous month, prices rose by 0.2 percent. This had also been forecast by experts.

As expected, the core inflation rate excluding energy and food remained at 3.2% in August. Compared to the previous month, core consumer prices rose by 0.3% - slightly more than forecast.

The Fed pays particular attention to the core rate. According to experts, it reflects the general price trend better than the overall rate.

Easing of monetary policy expected

The Fed is aiming for an inflation rate of two percent in the medium term. The Fed is heading towards an easing of its monetary policy.

On the financial markets, an interest rate cut on Wednesday in a week's time is considered a foregone conclusion. However, the extent of the interest rate cut remains open.

SDA