Analysts say the central bank will raise its key federal funds rate Wednesday by 0.25% to more than 5%. That would be the highest level since 2007.
While that's the lowest the annual inflation rate has been in more than two years, it's still too high for the Federal Reserve, which is looking to wrestle increases down to about 2%.
The Federal Reserve believes it can slow the economy to reduce inflation without causing people to lose their jobs en masse. While the overall inflation rate has come down, there are key categories of consumer-focused services that have not. In particular, one measure of what has come to be known as"supercore" inflation, which excludes the price of food, gas, and shelter, has been stuck at a 4% annual rate of increase since the first quarter of 2021,This measure includes items like professional and personal care services, among the items on which Americans continue to spend heavily.
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