Fed rate hike call seen tight as inflation heats up
A Federal Reserve interest-rate decision later this month may be a closer call than previously thought after Labor Department data showed consumer prices were up 3.7 percent last month from a year earlier, well above the Fed's 2 percent target and moving in the wrong direction. Higher gasoline prices from the Middle East war were a main driver. Excluding volatile food and energy prices, the core Consumer Price Index (CPI) was up 2.6 percent, more than the 2.5 percent economists polled by Reuters had projected. The Fed lifted the policy rate in September to a target range of 3.75 percent-4.00 percent to bring down too-high inflation, and officials have said they are looking closely for signs of broadening price pressures that could keep inflation high even if gas prices fall, necessitating more policy tightening. Wednesday's data contained plenty of such signs. "The surprise was not concentrated in any one item, like it was with wireless in the August report, but instead reflected a number of components showing strength, i.e., it was broad-based," wrote Omair Sharif, founder of Inflation
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