WASHINGTON–The newest inflation numbers make an even stronger case that more than one rate cut could be coming in 2024, according to one credit union economist.
The new Consumer Price Index (CPI) data show core prices, which exclude volatile food and energy items, climbed 3.2% over the previous 12 months and 0.2% since June.
It marked the first time that overall CPI inflation was firmly below 3% since early 2021.
“Both this data and the personal consumption expenditure index suggest that prices are moving toward the Fed's target,” said America's Credit Unions Senior Economist Dawit Kebede. “This opens up the possibility to start cutting rates in September, potentially making more cuts before the year ends than just the one cut announced in June.”
Weak Jobs Report
As CUToday.info reported earlier, the new CPI numbers also come on the heels of a weak jobs report for July, which showed unemployment had risen to 4.3%.
In addition, the Fed’s preferred inflation gauge—the personal-consumption expenditures, or PCE, price index—has fallen from a high of 7.1% two years ago to 2.5% in June, which is close to the central bank’s 2% target.