October Inflation Shows the September Cut Was a Mistake
The October inflation report can be added to the growing body of evidence that the Federal Reserve cut rates prematurely in September.
At first glance, the report seems rather mild. The consumer price index (CPI) rose 0.2 percent, the Department of Labor said Wednesday. That matches the rise reported for July, August, and September. That’s not perfect—ideally you would want inflation to still be falling rather than stabilizing—but does not look alarming.
If you look a bit deeper, however, you see a significant increase in inflation. Before rounding, the index rose 0.24405 percent, up from 0.17987 percent in September. So, inflation picked up by 0.06 percentage points and hit its highest level since April.
You can see this is a troubling trend toward higher inflation in the chart below.
To put this in perspective,…
