Fed’s Measure
An inflation gauge monitored by the Fed, the price index for personal consumption expenditures, rose to an annual rate of 1.2 percent in September. The central bank’s target is 2 percent.
Wholesale prices in the U.S. were unexpectedly weak in October as declines in the costs of services offset increases in goods, in a sign inflation is struggling to gain traction. The unchanged reading in the producer-price index from the previous month followed a 0.3 percent rise in September, a Labor Department report showed Wednesday in Washington. The median forecast of economists surveyed by Bloomberg called for a 0.3 percent increase.
Read more about the Fed’s rate path.
Traders are waiting for Fed Chair Janet Yellen’s testimony to the Joint Economic Committee of Congress on Thursday, where she may discuss her outlook for the U.S. economy and monetary policy.
“The inflation story is still in play,” with a rally in oil prices on hopes that OPEC members are discussing a cut in output also driving inflation expectations, said Birgit Figge, a fixed-income strategist at DZ Bank AG in Frankfurt. “The market is expecting an interest-rate hike in December, and there is no fundamental reason for the Fed” to disappoint, she said.
This article was provided by Bloomberg News.