US Annual CPI inflation Rises to 2.6%

The U.S. consumer price index, which measures the annual rate of inflation in the United States, rose 2.6%  year-on-year in October 2024, up from a 2.4% in September, according to the latest report from the U.S. Bureau of Labor Statistics.

Economists had expected the U.S. CPI, which tracks changes in prices across goods and services, to rise to 2.6% year-on-year, with the core reading, which excludes volatile food and energy prices, rising to 3.3% year-on-year.

On a monthly basis, prices rose 0.2% in October, more than the consensus estimate of a 0.1% increase, the same as in each of the previous three months, according to the Bureau of Labor Statistics report.

Analysts have speculated that Americans’ dissatisfaction with inflation and the accumulated price increases over the past few years played a major role in Donald Trump’s presidential election victory last week, and with the Republican Party also winning the Senate and the House, slowing the growth of price increases will likely be a major priority over the next four years.

Despite today’s CPI report on October price changes, traders are pricing in a 50-50 chance that the Federal Reserve will cut interest rates again in December, according to the FedWatch tool.

When many were celebrating the remarkable economic recovery from the Covid pandemic in the spring of 2021, Larry Summers, the renowned economist and former Treasury Secretary, warned the White House and the rest of Washington that inflation was a real danger.

That warning proved to be true; As price increases swept through the U.S. economy, crushing consumers and forcing the Federal Reserve to raise interest rates to their highest levels in decades, inflation became the top issue for voters and helped return Donald Trump to the White House.

The Federal Reserve cut interest rates last week for a second straight meeting and signaled that more cuts could be on the way.