For the Fed, Inflation Doesn’t Matter…for Now

When it comes to Federal Reserve interest-rate policy, what inflation is doing now matters much less than what it will be doing next spring.

What inflation is doing now is running fairly high. The Labor Department on Tuesday reported that its index of consumer prices rose a seasonally adjusted 0.3% in August from July, putting it 5.3% above its year-earlier level. Core prices, which exclude food and energy items in an effort to better capture inflation’s trend, were up 4% from a year earlier.

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