Federal Reserve policymakers have been breathing easier lately regarding inflation, and that faith that they're closer to achieving their goal will get a key test Thursday. The Labor Department will release its latest reading on the closely watched consumer price index, and its' expected to show further progress toward the Fed's 2% target in September. Specifically, the Labor Department's reading is expected to show an annual inflation rate of 2.
2% and a monthly gain of just 0.1%, according to the Dow Jones consensus. However, stripping out food and energy, the core rate is projected respectively at 3.
2% and 0.2%, a far distance from what policymakers would like. The disparity could figure its way into how quickly the Fed decides to move during the nascent rate-cutting cycle.
Officials slashed half a percentage point, or 50 basis points, off the benchmark overnight borrowing rate at the September meeting. However, following a much better than expected jobs report for September, Fed officials in recent days have indicated a likely more measured approach to cuts ahead. Details in Thursday's report will matter: Housing inflation has proven to be stubborn, though policymakers still expect lower rent renewals to feed into the data the months progress.
But a sudden uptick in items such as vehicle prices and other discretionary items might spook the Fed over whether persistently robust consumer demand could keep inflation elevated. In a speech Wednesday, Dallas Fed President Lorie L.
