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An Optimistic Inflation Report Reduces Pressure on the Fed to Raise Rates

A cooler-than-expected October inflation report may halt rates

Inflation eased in October and price increases showed encouraging signs of slowing under the surface, according to fresh data released on Tuesday. The report provided the Federal Reserve with renewed evidence that its battle against rapid inflation is working — and likely reduced the need for further rate increases.

The overall Consumer Price Index slowed to 3.2 percent last month on a year-over-year basis, lower than the 3.7 percent reading in September and the coolest since July. That deceleration owed partly to more moderate energy prices.

Even with volatile fuel and food prices stripped out, a closely watched "core" price measure climbed 4 percent in the year through October, slower than the previous reading and weaker than what economists had expected.

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