“Other factors fueling this worry include the still-high core inflation rate and, related to that, the possibility that the process of goods dis-inflation may end before service sector inflation is well under control,” he added.

Mark Zandi, chief economist of Moody’s Analytics, said the spike in oil prices were a threat to his optimism about US inflation.

Inflation has fallen from the 40-year highs it hit in mid-2022, rising at 3% through June. That followed the Fed’s aggressive interest-rate hikes since early last year.

The US central bank has raised benchmark borrowing costs by 500 basis points in its fastest rate-hiking cycle in history, with traders expecting more rises this year as it seeks to cool consumer price pressures to its 2% target.

Source: Business Insider