Price index rises despite Fed bids to combat inflation
The Bureau of Economic Analysis department of the Fed says that the price index is still on the rise, an indication of sharp market inflation.
The price index in the United States, the main indicator used by the Federal Reserve to monitor inflation, has increased by 6.2% year on year in September, the US Commerce Department said Friday.
"From the same month one year ago, the PCE price index for September increased 6.2 percent," the Bureau of Economic Analysis said during a press briefing. Compared to last year, the agency said, energy prices jumped by 20.3%, food prices by 11.9%, while costs of services rose by 5.3%, and prices of goods by 8.1%.
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The US Federal Reserve has hiked interest rates since the beginning of this year from 25 points back in February to 300 in September. However, the report shows that the rate hikes have had little impact on the soaring domestic inflation.
Despite the weak results shown by the rate increase on inflation, Fed chief Jerome Powell announced that the central bank is not considering a pause or decrease in interest rates, adding that until the end of the year another 125 basis points might be added.
The Fed has been on a combative campaign to further hike interest rates, and Powell made it clear that the fight against inflation was not over.
US inflation surged to a new four-decade high in May, defying hopes that price pressures had peaked and deepening President Joe Biden's political troubles as Americans struggle to meet the cost of essentials like food and gas.
Earlier in the month, a new Bloomberg Economics model projected that in the next 12 months, a recession in the United States is effectively certain.
These projections come just before the midterms in November and shortly after Biden announced, while in an ice cream shop, that the US "economy is strong as hell", which plunged him into hot waters as his comment comes amid one of the country's worst economic crises since 2008.
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It is worth noting that the economic situation affecting the financial standpoints of American families and businesses is burdening Biden's popularity, which will affect his chances of winning the November midterm congressional elections.