Prices were 7.7% higher in October compared with the year before, as inflation defies Federal Reserve’s interest rate hikes
rose 8.2 percent compared with the year before, and 0.4 percent compared with August, more than analysts’ expectations. Core inflation, a measure closely watched by the Fed that strips out more volatile categories such as food and energy, also came in hot.
A major question is whether prices can be tamed with rate hikes alone. The Fed’s decisions can’t fix certain sources of inflation, like bungled supply chains, worker shortages or Russia’s war in Ukraine.In Lansing, Mich., Jerry’s Automotive is still having issues getting enough engines and transmissions in stock.
and they often didn’t want to hunt for a new car. The shop has been around for over 50 years, and Luoma hopes it’ll make it through the uncertainty ahead. People always need their cars fixed, after all. “While a recession might make us step back and think...we’ve seen peaks and valleys with the economy,” Luoma said. “And we’ve always managed to be okay.”With the latest batch of inflation data, analysts and Fed officials are likely to pay special attention to rental costs, which make up a large portion of what economists refer to as the “basket of goods” used to calculate what’s known as the consumer price index. So far, rents are showing little improvement. Rent costs rose 0.
But the hope is that, eventually, a major slowing in the housing market will pull rental costs down, too. The housing market is the main part of the economy that has responded to the Fed’s rate hikes, sinceare especially sensitive to the central bank’s decisions. The average rate for a 30-year fixed mortgage, the most popular home-loan product, reached 7.08 percent in late October, causing more prospective buyers to bow out of the market.
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