Money / inflation Inflation Falls Closer to Fed's Target Rate American voters get last report before election as it cools to annual rate of 2.1% By Newser Editors and Wire Services Posted Oct 31, 2024 9:04 AM CDT Copied A shopper checks out at a Target tore in Glenview, Ill., Sunday, Oct. 27, 2024. (AP Photo/Nam Y. Huh) An inflation gauge closely watched by the Federal Reserve has dropped to near pre-pandemic levels. It's the last such report on a subject high on voters' minds before Election Day. The big stat: The Commerce Department reported that prices rose just 2.1% in September from a year earlier, down from a 2.3% rise in August, per the AP. That is close to the Fed's 2% inflation target and is in line with readings in 2018, well before prices began surging after the pandemic recession. Monthly: On a monthly basis, prices inched up 0.2% from August to September, up slightly from a 0.1% increase from July to August. Core prices: Yet some signs of inflation pressures remained. Excluding volatile food and energy costs, so-called core prices rose 2.7% in September from a year earlier, unchanged from August. On a monthly basis, core prices rose 0.3% from August to September, up from just 0.1% from July to August. The increase in the core rate is higher than the Fed would prefer, and if it remains stubbornly elevated, it could lead the central bank to slow its pace of rate cuts in the coming months. What's next: Still, for the past six months, core inflation has declined to a 2.3% annual rate, down from 2.5% in August. And economists expect the Fed to cut its key rate by a quarter-point when it meets next week. Election: The latest signs of a sustained cooling of inflation arrive five days before an election in which many voters have soured on the economy, mostly because average prices remain nearly 20% higher than they were four years ago. Former President Trump has largely blamed the Biden-Harris administration's energy policies and promised that inflation would "vanish completely" if he is elected. Economists, however, say Trump's policies would actually worsen inflation, mainly because of his plans to impose sweeping new tariffs and embark on mass deportations of migrants and other immigrants. Kamala Harris' proposals on price gouging, experts have said, would have little short-term impact. (More inflation stories.) Report an error