US awaits inflation data that could affect Fed rate — Fortune
The United States will release two key inflation reports for August this week that could affect the Federal Reserve's further decisions on the key interest rate. Wall Street expects the Fed to raise the rate at least once this year to curb rising prices.
As Fortune reports, citing the Associated Press, the producer price index (PPI) is due to be published on Thursday. It reflects changes in prices for businesses before companies can pass costs on to consumers.
On Friday, the United States will release the consumer price index (CPI) for August. It includes data on changes in the cost of goods, including food, furniture and clothing, as well as services, from car repairs to travel and restaurant dining.
Inflation exceeds the Fed's target
Inflation in the United States remains above 3%, putting pressure on households and businesses. According to Fortune, price growth is also outpacing wage growth, increasing the burden on households.
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The Fed is keeping the key interest rate unchanged. The official target of the US central bank is to slow inflation to 2%.
Energy prices and tariff disputes
According to Fortune, inflation is being fueled by rising energy prices amid the US war with Iran. Shipping through the Strait of Hormuz, through which about 20% of global oil supplies passed before the war, has been restricted. This has contributed to higher prices for gasoline and goods transported by sea.
The risk of further price increases is also created by US tariff disputes with most countries around the world. PPI and CPI data are expected to give markets and the Fed a clearer picture of the further direction of inflation.
