rose month-over-month at the fastest pace in 14 months in August, and while that was driven largely by volatile energy costs, a measure of underlying inflation also accelerated unexpectedly.
A new Summary of Economic Projections released after the meeting will show if the majority of policymakers still anticipate one further quarter-point increase by the end of the year, as in their June outlook. Since their meeting in July, only two Fed policymakers have said they felt rates do not need to rise further, while others noted their outlook for slowing inflation was built around a slightly higher federal funds rate.
Much of the information has pointed towards a slowing-but-still-growing economy with easing price pressures - the "soft landing" that policymakers have hoped to engineer.The pace of job and wage growth has eased, and other labor market measures, such as the rate at which workers are quitting jobs, the rate of job openings, and the number of unemployed people per open job, have edged towards the levels seen before the COVID-19 pandemic disrupted the economy.
Overall bank credit has been falling on a year-over-year basis since mid-July, evidence of financial firms tightening access either through higher rates or stricter standards.What hasn't happened - and what Powell says is necessary - is a decline in overall economic growth to the sort of below-trend pace that would add to policymakers' confidence that inflation will continue what has been a sustained decline since the summer of 2022, when it hit a 40-year high.
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