US Inflation Hits New Low: Path Clear for Fed Rate Cut

US inflation reached its lowest point since February 2021, allowing for potential Federal Reserve rate cuts. Consumer prices rose just 2.3% yearly in September. This reflects lower gas and slight food cost rises. The economic expansion continues, potentially impacting the presidential campaign dynamics.

US inflation reached its lowest point since February 2021 last month, clearing the way for another potential Federal Reserve rate cut. Consumer prices increased by just 2.3% from a year ago in September, down from a 2.5% rise the previous month, according to economists surveyed by FactSet.

The cooling inflation data follows a mostly positive jobs report, which showed accelerated hiring and a drop in the unemployment rate to 4.1%. The economy expanded at a solid 3% annual rate in the second quarter, with similar growth likely in the third.

These developments could affect the presidential campaign landscape, with Vice President Kamala Harris gaining ground on former President Donald Trump in public opinion polls regarding economic management. The Federal Reserve is unlikely to make further drastic rate cuts, signaling a more gradual approach to monetary policy.

(With inputs from agencies.)