Bank of America resets inflation forecast ahead of CPI

Group 1 - The upcoming Consumer Price Index (CPI) update on October 24 is crucial for determining the Federal Reserve's interest rate decisions during its meeting on October 29 [1][3] - The last CPI data from August indicated a headline inflation rate of 2.9%, an increase attributed to recently imposed tariffs, compared to 2.3% in April before most tariffs were enacted [2] - The September CPI report is particularly significant as it was delayed due to a government shutdown and will provide key information ahead of the Fed's policy-making meeting [3] Group 2 - The Federal Reserve operates under a dual mandate to maintain low unemployment and inflation, which can often conflict with each other [4][5] - Chairman Jerome Powell has faced challenges in balancing these goals, as raising interest rates tends to lower inflation but can increase unemployment [5] - Concerns about inflation have led to a delay in rate cuts, as the Fed aims to avoid exacerbating inflationary pressures caused by rising tariffs [6] Group 3 - Bank of America has updated its inflation forecasts, indicating that if inflation continues to rise above the Fed's target of 2%, the Fed may be reluctant to cut interest rates further due to fears of triggering high inflation similar to the situation in 2022 [7]