Opinion: The Fed Is Losing the Battle Against Inflation, and There's No Easy Fix
One week ago, on Aug. 10, 2023, the U.S. Bureau of Labor Statistics released the much-anticipated July inflation report. Considering how aggressive the Federal Reserve has been with raising rates -- a cumulative 525 basis-point increase in the federal funds target rate since March 2022 -- Wall Street was looking for clear signs of the U.S. inflation rate tapering.
For the past couple of months, the headline figure in the monthly inflation report has signaled progress. Despite a very modest uptick in the U.S. inflation rate in July, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), a 3.2% rate of inflation is far and away a major improvement from the 9.1% inflation rate reported in June 2022.
While it would appear that the central bank's monetary policy is working as intended, a deeper dive suggests the Fed is actually losing the battle against inflation, with no clear fix in sight.
Source Fool.com
