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Fed Likely to Want Further Evidence of Inflation Slowdown

Easing in price pressures last month followed reports of stronger-than-expected wage growth, complicating rate-setting outlook

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A slowdown in inflation last month, following recent indications of a robust labor market, complicates the Federal Reserve’s decision on how much to raise interest rates next month.

Data on inflation and economic activity are likely to guide whether central bank officials lift their benchmark federal-funds rate by a half-percentage point or three-quarters of a point at their Sept. 20-21 policy meeting. They have said they want to see evidence that price pressures and economic growth are cooling before they moderate their pace of rate increases.

 

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