Inflation leveled off at 3.7% in September, continuing a gradual consumer price slowdown
over the past few months. The inflation rate had risen steadily over the summer after falling to a 50-year low in May. The main driver of the current slowdown is lower gas prices, in addition to subdued pricing for food, apparel, and vehicle costs. Core inflation, which excludes volatile food and energy prices, is up 2.7% from the year prior, and is likely to remain low, with strong labor market conditions and consumer spending remaining subdued. With inflation holding steady and labor market conditions improving, the Federal Reserve is likely to keep interest rates near record lows for the foreseeable future.