Inflation in the United States surged in August as companies passed on the tariffs imposed by the Donald Trump administration to the prices of goods and services.
An update from the Consumer Price Index (CPI), which measures the price of a basket of goods and services, showed a 2.9% increase compared with the same period last year.
Despite this rise, Wall Street remains confident that the Federal Reserve will cut interest rates at its next committee meeting scheduled for next week. Since last year, the Fed has been reluctant to lower interest rates, citing concerns about the fragility of the economy linked to new trade and immigration policies.
The central bank has been trying since 2021 to bring the inflation rate down to 2%, but Fed Chair Jerome Powell recently said that current economic conditions “may warrant adjusting our policy stance.“
Powell noted that customs duties had driven up the cost of goods while, at the same time, the labour market was showing worrying signs of slowing.
