The Federal Reserve Bank of Cleveland’s innovative approach to analyzing inflation presents a concerning picture. Utilizing its inflation nowcasting tool, the Bank provides daily nowcasts for two pivotal price indexes – the price index for Personal Consumption Expenditures (PCE) and the Consumer Price Index (CPI). According to the Bank’s August data, the CPI is predicted to accelerate to 3.82%, marking a significant 0.79% increase within a month.
Further, the Core CPI, stripped of volatile food and energy components, is also forecasted to augment by 0.38% within the same period, leaving the year-over-year core CPI at an alarming 4.46%. This sharp upswing in inflation metrics signals increased pressures on the Federal Reserve to curb inflation. The data emphasizes the arduous task ahead, underscoring the need for carefully calibrated strategies to mitigate the amplified inflationary pressures and stabilize the economy.
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