US inflation to pressure Fed to keep raising rates

Inflation in the United States accelerated in September, with the cost of housing and other necessities intensifying pressure on households, wiping out pay gains and ensuring that the Federal Reserve will keep raising interest rates aggressively.

Consumer prices, excluding volatile food and energy costs, jumped 6.6 percent in September from a year ago, the fastest such pace in four decades. And on a month-to-month basis, such "core" prices soared 0.6 percent for a second straight time, defying expectations for a slowdown and signaling that the Fed's multiple rate hikes have yet to ease inflation pressures. Core prices typically provide a clearer picture of underlying price trends.

Overall prices rose 8.2 percent in September compared with a year earlier, down slightly from August, the government said Thursday in its monthly inflation report. But from August to September, prices increased 0.4 percent, faster than the July-to-August increase. Though cheaper gas helped slow the broadest measure of inflation, costlier food, medical care and housing pointed to the breadth of price pressures across the economy.
"We still have no evidence that inflation is decelerating," said Matthew Luzzetti, an economist at Deutsche Bank. "Let alone the clear and convincing evidence that the Fed is looking for."

Oct. 13's report represents the final U.S. inflation figures before the Nov. 8 midterm elections after a campaign season in which spiking prices have fueled public anxiety, with many Republicans casting blame on President Joe Biden and congressional Democrats.
Speaking on Oct. 13 in Los Angeles, Biden acknowledged the pain that inflation is causing many people, while suggesting that the latest figures showed "some progress."

"Americans are...