Next week the Federal Reserve meets to decide whether to increase interest rates or to keep them unchanged — but the picture on inflation looks unclear. On October 17, the Bureau of Labor Statistics announced that the Producer Price Index for finished goods fell by 1.3% in September. Much of this was driven by the drop in energy prices — which have seen the sharpest decline in nearly three years. Core wholesale prices, however, went up by 0.6% because of a recovery in the cars and light trucks business. What do these mixed signals mean for the economy? Will the Fed’s Open Market Committee keep rates steady or will there be an increase? Jeremy Siegel, a professor of finance at Wharton, spoke with Knowledge@Wharton about why the Fed is unlikely to raise interest rates, at least until the end of the year.
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