U.S. consumer inflation rose slightly last month, driven by a rise in housing costs, government data showed Wednesday, complicating the U.S. Federal Reserve’s plans to cut interest rates.

The consumer price index (CPI) rose to 2.6 percent in October year-on-year, from 2.4 percent in September, the Labor Ministry said in a statement.

That matches the median forecast of economists surveyed by Dow Jones Newswires and the Wall Street Journal.

Although Wednesday’s data release complicates the Fed’s plans to cut interest rates, it remains broadly on track to slow the pace of price rises, Gregory Daco, an economist in the US, told AFP. head of EY.

“The truth is that the fundamentals today remain disinflationary,” he said. “Consumer caution, shrinking margins, slowing wage growth, strong productivity growth, all of this is fundamentally disinflationary.”

A measure of inflation that excludes volatile food and energy costs, known as “core” inflation, remained unchanged at 3.3% last month from a year earlier , highlighting the continuing challenges facing the Fed.

“This has been a hard-won recovery, but we are making progress for working families,” Lael Brainard, White House national economic adviser, said in a statement.

“We will continue to fight to reduce costs for families on key items like housing and health care, and against policies that would undermine our progress in reducing inflation,” added Brainard, who will probably not stay not in office once President Donald Trump is elected. returns to the White House in January.

Monthly headline inflation increased by 0.2 percent, while core inflation rose by 0.3 percent. Both figures were the same as a month before.

The housing index accounts for more than half of the monthly rise in overall inflation, according to the Labor Department, which jumped 0.4 percent in October.

The October increase puts a bit of a damper on the work of the Federal Reserve, which recently began lowering interest rates in response to a slowdown in inflation.

Along with slowing inflation, the labor market has shown some signs of slowing while remaining relatively healthy, and growth has remained robust – all good signs for the world’s largest economy.

The US central bank ignored the economic uncertainty sparked by Trump’s US presidential victory and cut another quarter of a percentage point last week, to between 4.50 and 4.75 percent.

Despite the slight rise, October CPI data is unlikely to influence the Fed too much, economists at High Frequency Economics wrote in a note to clients.

“The inflation figures for October turned out about as expected,” they said, adding: “There is surely no evidence of a collapse in prices, as might be expected in a broken economy.”

Futures traders expect the Fed to continue its momentum, estimating there is about an 80% chance of another rate cut next month, according to CME Group data.

Next year, the path forward will be less clear, as much will depend on the decisions President-elect Donald Trump makes when he takes office in January.

“I think there will be pressure on the Fed to ease monetary policy more quickly, whether direct or implicit pressure,” EY’s Daco told AFP. “But I think the Fed will err on the side of caution in 2025 because there will be upside risks to inflation.”

These factors, Daco said, include potential deregulation, immigration restrictions and the likely implementation of potential tax cuts, all of which could prove inflationary.

“When you combine all of these with the Fed trying to find a neutral position, I think they will err on the side of caution,” he added.