the Fed still has a long way to go

(CNN)– US consumer prices rose 7.7% in the year to October, according to data released Thursday. The report was better than expected and surprised investors, with markets rallying on the news. However, the Federal Reserve still has a long way to go in its battle to control inflation.

The Consumer Price Index, which measures changes in the prices of a variety of consumer goods and services, had measured 8.2% in September.

“Today’s CPI report shows that inflation is moving in the right direction,” said Eric Merlis, managing director and co-head of global markets at Citizens. “The report provides ammunition for the Fed to start tightening below 75 basis points. This news will be welcome at the Fed.”

Taking a monthly basis, prices rose 0.4%, equal to the previous month’s increase, also 0.4%. Economists had expected the monthly figure to rise, given the surge in energy prices in October.

Still, there appeared to be some gains in one of the metrics the Fed is watching most closely: Core CPI, which excludes the more volatile categories of food and energy, was 6.3% for the year ending October. , lower than the increase of 6.6% published in September.

Month on month, the core CPI increased by 0.3%. It had recorded monthly increases of 0.6% in both August and September.

This story will be updated.

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