Over the past 12 months, consumer prices have risen by 3.7%, substantially below the 17-year high of a 12-month price increase of 5.6% set this summer. Core prices are up 2.2% over the past 12 months.

This price moderation is giving the Federal Reserve the room it needs to cut interest rates to battle the economic slump. The central bank is expected to cut the federal funds rate, the interest that banks charge each other, down to 0.5% at its December meeting, even lower than the 1% where the funds rate stands currently. The 1% funds rate ties the record low for the past half century.
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