Inflation, the economic force that helped oust the Democratic party from the White House, likely remained a little too hot for comfort in October, forecasts show.

The Bureau of Labor Statistics’ report on Thursday is expected to show the Consumer Price Index rose 2.6% on an annual basis in October, up from 2.4% in September, according to a survey of economists by Bloomberg Finance. “Core” inflation, which excludes volatile prices of food and energy, likely remained at 3.3%, the same as in September.

Both of these rates are higher than the 2% annual rate targeted by the Federal Reserve, which sets the nation’s monetary policy with the goal of keeping price increases steady. Inflation has fallen from a peak in mid-2022, when the CPI reached its highest level in more than 40 years.

If inflation remains stubbornly high, it may also ensure that borrowing costs remain high for longer. Fed officials were effective fed funds rate Aiming to reduce inflation by keeping borrowing costs of all types of loans high, it reached its highest level in the last two decades by September. inside Last two meetings of the Fed policy committeeCentral bankers lowered interest rates, believing that inflation was on track towards the 2% target.

Stubborn Inflation Could Keep Interest Rates High

However, persistent inflation may cause the Fed not to cut further interest rates.

Core inflation is expected to rise 0.3% since September, the fourth month in which the rate has risen or remained the same rather than falling.

“Core inflation has slowed for four months,” Brean Capital Markets economists John Ryding and Conrad DeQuadros wrote in a commentary. “Another gain of this magnitude could challenge the Fed’s rate cut at its December meeting.”

The path of inflation has political as well as economic consequences. Voters are angry about price increases under the Biden administration, exit polls show was an important factor President-elect Donald Trump’s victory on Tuesday.