Inflation in the US Drops to 2.4% and benefits Harris

Inflation in the US Drops to 2.4%, Benefiting Harris
This was reported by the media outlet EFE.
Here are the details.

Inflation in the United States continues its downward trend, falling by one-tenth in September to 2.4% year-over-year. This figure eases pressure on the Federal Reserve (Fed) to reduce interest rates and favors Vice President Kamala Harris as the 2024 presidential election approaches.

Although the drop is smaller than economists expected, it marks the sixth consecutive month of decline in the Consumer Price Index (CPI) and is the lowest rate since February 2021.

This data comes shortly after the Fed announced its first interest rate cut in three weeks.

According to the Bureau of Labor Statistics (BLS), prices rose by 0.2% on a monthly basis in September.

Inflation in the US Drops to 2.4%, Benefiting Harris

BREAKING: US inflation falls to 2.4%, higher than expectations pic.twitter.com/YWBWTcfQY3

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Housing and food prices increased by 0.2% and 0.4%, respectively, accounting for over 75% of the monthly price hike. In contrast, the energy index decreased by 1.9% in September and has fallen by 6.8% over the past year.

Core inflation, which excludes food and energy, rose by 0.3% in September, bringing it to 3.3% year-over-year. This remains a key indicator for the Fed when making monetary policy decisions.

On September 18, the Fed began a cycle of interest rate cuts with a half-point reduction, although Fed Chair Jerome Powell made it clear that this pace of cuts is not expected to continue.

The US Inflation Drop Slows the Fed’s Rush

September inflation was 2.4%, slightly higher than expected (2.3%).

Core inflation rose to 3.3%, also above forecasts.

This is the first time since March 2023 that core inflation has risen again.

Will the Fed stop cutting rates? 👀 pic.twitter.com/vU3XBjSpEN

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«Decisions will be made meeting by meeting, and this process will unfold over time. There is nothing suggesting the committee is in a hurry to do so,» he stated.

According to financial firm eToro, this month’s CPI report could lower expectations for rate cuts at the next Fed meeting, scheduled for November 6-7, just a day after the elections.

Recent employment figures, which showed the creation of 254,000 new jobs, have also influenced this context, benefiting both Joe Biden and Kamala Harris.

Interest rates have remained unchanged since July 2023, with a target range between 4.75% and 5%.

This Is a Relief for Joe Biden’s Administration

The Fed has indicated that any future decisions will depend on various factors, including labor market conditions and inflationary pressures.

The inflation drop is a relief for President Joe Biden’s administration and, in particular, for Democratic candidate Kamala Harris. As the election approaches, the economy remains one of the key issues for voters.

National Economic Advisor Lael Brainard emphasized that the 2.4% inflation rate is comparable to pre-pandemic levels. «Inflation has returned to pre-pandemic levels, 16 million jobs have been created, interest rates are lower, and unemployment is low. Our economy has grown 3.2% annually during the Biden-Harris administration, more than during the previous administration,» she stated.

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