Numbers are above the Federal Reserve’s target.
According to data released Friday by the Bureau of Economic Analysis, inflation has hit the highest rate in 30 years, fueling further inflationary fears. The core personal consumption expenditures (PCE) price index, the gauge favored by the Federal Reserve, increased by 4.3% on an annual basis and 0.4% for the month of August.
Core PCE inflation, which does not include energy and food prices, rose at a 3.6 percent annual rate. That number is well above the Fed’s target of 2 percent and adds credence to the Fed detractors’ calls for it to begin tapering its asset purchases and ultimately raise interest rates from their near-zero current level.
Top Federal Reserve officials met recently to discuss the nation’s economic progress and decided to raise their forecast for prices. They drove up its predictions for this year’s inflation to 4.2 percent. However, it expects prices to fall back next year, although they will still be above previous predictions.
As the Lord Leads, Pray with Us…
- For members of the Federal Reserve as they assess what is happening with inflation and work on adjustments to monetary policies.
- For members of Congress as they deliberate spending bills that would affect inflationary pressures.
- For the president and his economic advisors as they evaluate the state of the economy.
Sources: Washington Examiner, CNBC
