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Fed in Hot Seat

Fed in Hot SeatFed in Hot Seat

A pair of inflationary indicators whiffed on expectations this week, potentially complicating life for officials at the Federal Reserve as they aim to raise interest rates, reduce the size of their balance sheet and take further steps to move US monetary policy back to a more normal place before year’s end, CNBC reported. Friday’s consumer price index–which tracks the prices consumers pay for an assorted basket of goods and services–ticked up only 0.1% in July after falling flat in June and declining 0.1% in May. Fuel oil again weighed on the inflationary tracker, as prices slid for a sixth consecutive month. But even excluding what have historically proven to be volatile food and energy price components, the core index was up only 1.7% on the year. July, therefore, marked the third consecutive month annual inflation gains sat at a modest 1.7%. The Fed’s primary responsibilities in crafting monetary policy, as delineated by Congress, include maximizing employment in the US and maintaining steady long-term pricing pressures.

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