Buyseotools Trading Inflation is ending, but that’s ‘little comfort to households’

Inflation is ending, but that’s ‘little comfort to households’

Inflation is ending, but that’s ‘little comfort to households’ post thumbnail image


Softer-than-expected inflation boosts case for no more rate hikes: Moody's Analytics' Mark Zandi

The prolonged period of high inflation may finally be coming to an end, according to an analysis of recent data by UBS global wealth management.

In October, the consumer price index, a closely followed inflation gauge, increased 3.2% from 12 months earlier, down from 3.7% in September, the U.S. Bureau of Labor Statistics said Tuesday.

The report marked a significant improvement on the pandemic-era peak of 9.1% in June 2022. 

“By next spring, inflation will have slowed to a comfortable level for both the Fed and investors,” said Solita Marcelli, chief investment officer of the Americas for UBS Wealth Management.

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“The slower pace of inflation is little comfort to households still dealing with the cumulative effect of rising prices,” said Greg McBride, Bankrate’s chief financial analyst.

“The strain on household budgets is real.”

47% of adults say monthly expenses exceed income

Although Fed Chair Jerome Powell recently said “inflation is still too high,” a move in December “seems highly unlikely,” McBride said. “But stubbornly high core inflation will have the Fed keeping their options open into 2024.”

Altogether, the central bank has raised rates 11 times in a year and a half, pushing its key interest rate to a target range of 5.25% to 5.5%, the highest level in more than 22 years. 

However, the Fed is unlikely to be able to claim victory just yet, Marcelli also said.

For consumers, that means there will be no relief from sky-high borrowing costs.

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