September 16

9/16 - Last week’s CPI report offered a glimmer of hope on inflation. The Consumer Price Index was up just 2.5% (year-over-year) in August, down from highs of 9% two years ago. Unfortunately, it doesn’t feel that way for middle and lower-income Americans, who are getting hammered by increased living costs. Prices for electricity are up 4.9% from a year ago, rent is up 5.4% and car insurance up 16.5%. Even worse for the restaurant industry, food away from home was up 4.0% in August while food at home has risen only 0.9% over the past year. That’s put restaurant meals on the chopping block for many budgets. The good news is that the Federal Reserve will almost certainly cut interest rates at its open committee meeting this week (Sept 17-18.) The economy probably needs a half-point cut, but the Fed is likely to drop rates by just a quarter-point so as not to look partial or controversial ahead of the Nov. election.