Fed official throws cold water on report of waning inflation: 'We have a ways to go'
Inflation was the top issue for Americans in the midterm elections
Markets overreacted to the news that inflation slightly waned in the U.S. in October, according to Federal Reserve governor Christopher Waller said Monday.
Data showed just 0.3% growth in inflation from September to October, the smallest monthly bump all year, but Waller cautioned that Americans shouldn't read too much into it, according to The Wall Street Journal. Inflation has been the top issue on Americans' minds throughout 2022, with polls showing voters cared more about it than anything else in the midterm elections.
"The market seems to have gotten way out in front on this," Waller told WSJ. "Everybody should just take a deep breath—calm down. We have a ways to go yet."
The drop only manifested in the Labor Department's report on "core prices," which does not include food and energy costs, according to WSJ.
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President Joe Biden speaks in the State Dining Room of the White House, Saturday, March 6, 2021, in Washington. (AP Photo/Alex Brandon) (AP Photo/Alex Brandon / AP Newsroom)
The Consumer Price Index, however, did show a 0.4% increase in inflation compared to September.
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Waller wasn't the only economist to check the brakes on the news.
"Inflation slowing to its lowest annual rate since January is news that both the Fed and investors can get behind," said Mike Loewengart, the head of model portfolio construction at Morgan Stanley. "But remember that even as we see a slowdown, prices remain elevated and have a long way to go before normalizing."
US President Joe Biden delivers remarks on efforts to lower high gas prices in the South Court Auditorium at Eisenhower Executive Office Building June 22, 2022 in Washington, DC. (JIM WATSON/AFP via Getty Images / Getty Images)
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Scorching-hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already stretched paychecks are heavily impacted by price fluctuations.
Fox Business' Megan Henney contributed to this report.