Fed’s preferred inflation gauge gives Jerome Powell green light to cut rates

The Federal Reserve’s preferred measure of inflation changed little in September, likely easing the way to a widely expected interest rate cut by the central bank next week.

Prices rose 0.3% in September from August, the Commerce Department said Friday in a report that was delayed five weeks by the government shutdown.

It was the same increase as the previous month.

Inflation remains above the central bank’s 2% target. Helayne Seidman

Excluding the volatile food and energy categories, core prices rose 0.2% in September from August, the same as the previous month and a pace that if it continued for a year would bring inflation closer to the Fed’s 2% target.

Compared with a year ago, overall prices rose 2.8%, up slightly from 2.7% in August.

Core prices also rose 2.8% from a yea