U.S. consumer prices increased by the most in nine months in October. This points to steadily rising inflation.
Though overall inflation could slow in the months ahead following a recent slump in oil prices, economists said Fed officials were likely to regard any retreat as temporary and focus on underlying price pressures.
The U.S. central bank, which has a 2 percent inflation target, left interest rates unchanged last Thursday after a two-day policy meeting.
“Fed officials are likely to look past the swings in energy prices that could slow the overall CPI in coming months to see further upward pressure on underlying prices,” said Ben Ayers, senior economist at Nationwide in Columbus, Ohio. “As such, we still expect the Fed to raise interest rates in December.”
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