OCTOBER 27, 2025 – – INFLATION IS 3 PERCENT, RATES TO COME DOWN
The consumer price index for September was released, it came in at 0.3 percent for the month, or 3 percent annually. Both numbers were lower than expected, which will keep the Fed on track to lower rates this week. Excluding the volatile food and energy prices, the core CPI showed a 0.2 percent gain for September and was at an annual rate of 3 percent. The Bureau of Labor Statistics exceptionally released the data during the government shutdown to allow the Social Security Administration to apply a cost-of-living adjustment to benefit checks, but it also gave the Fed much needed data prior to their October meeting.
The Fed has been focusing on the softening labor market, prioritizing their full employment mandate over the 2 percent inflation target. The markets believe rates will come down on Wednesday and are anticipating another rate cut in December. The benchmark overnight borrowing rate is presently in the 4 to 4.25 percent range.