The Federal Reserve cut interest rates by half a percent last week, playing catch-up to adjust policy for a world in which inflation has receded and the economy may be slowing. New data out Friday morning should make them glad they did.
Why it matters: The latest data on inflation, consumer spending and incomes affirm the outlook that undergirded last week's rate cut, that prices are converging toward the Fed's 2% target and consumers are becoming more cautious.
The Federal Reserve's favorite inflation gauge showed mild price increases for yet another month as incomes held steady and consumers pulled back on spending, the government said on Friday.
Why it matters: Inflation kept receding in August, confirming the trend that convinced the central bank to lower interest rates earlier this month. Other details of the report suggest a cooling — though not collapsing — economy.
