Inflation is heading on the downtick after months of interest rate hikes, high prices, and economic stress for Americans, according to the latest reports.
Excluding volatile food prices, inflation was almost flat in October compared to the month prior.
Overall, the consumer price index rose just 3.2% from a year earlier, down from September’s 3.7% rise, according to the Bureau of Labor Statistics.
With inflation stilling, the Federal Reserve is expected to begin cutting interest rates by May, according to a report from Reuters.
Chicago Federal Reserve Bank President Austan Goolsbee shared at the Detroit Economic Club this week that the numbers “looked pretty good.”
Still, Goolsbee said that housing inflation could be doing better but that the drop in CPI inflation from 6.3% in January looks like it’s on track to be the fastest one-year peacetime decline in the last four decades.
While the numbers look promising, the Fed has shared that it wants to see consecutive good readings before cutting interest rates.
“The Fed looks smart for effectively ending its tightening cycle as inflation continues to slow. Yields are down significantly as the last of investors not convinced the Fed is done are likely throwing in the towel,” Bryce Doty, portfolio manager at Sit Fixed Income Advisors, shared with CNBC.
The report showed that core inflation, which excludes energy and food, rose only 4% compared to a year earlier.
This was the slowest pace seen in more than two years, another sign of calmer waters ahead.
“You can say goodbye to the rate hiking era,” Brian Jacobsen, chief economist at Annex Wealth Management, shared with Reuters.