Fed Shifts Focus to Timing of Next Rate Hike Amid Persistent Inflation

The Federal Reserve is shifting its focus from whether to raise interest rates again to how quickly it needs to do so, as stubborn inflation and consistent economic growth persist.

Inflation remained elevated in August at 3.4% compared to a year ago, but down from July's rate of 3.7%. The Federal Reserve targets an inflation rate of 2%.

The economy grew at a healthy 2.2% pace in the second quarter, with consumer spending rising 0.9% in August and business investment increasing by 9% excluding housing.

The rapid buildout of artificial intelligence has been driving growth, but also pushing up inflation with high demand for computer chips and other tech goods.