Inflation in the United States inched higher in October, signaling a potential stall in the Federal Reserve’s progress toward stabilizing prices, according to the latest report from the Labor Department. Consumer prices rose by 2.6% over the past year, slightly above the 2.4% annual increase recorded in September, driven mainly by rising housing and food costs.

The latest data has prompted analysts to reassess expectations for interest rate cuts by the US central bank. The Federal Reserve, which aims to maintain inflation around a 2% target, has been gradually lowering interest rates since September, pointing to a significant reduction in inflation from its peak of over 9% in June 2022. However, the latest uptick has left analysts cautioning that the “last mile” toward fully reining in inflation could prove difficult.

“While substantial progress has been made in the fight against elevated inflation, the ‘last mile’ is proving more challenging,” said Josh Jamner, an investment strategy analyst at ClearBridge Investments. Jamner added that he does not foresee substantial shifts in market dynamics due to the data, which aligned with economists’ expectations.

Month-to-month, prices advanced by 0.2% from September to October, sustaining the same pace seen over the prior three months. This consistency offers the markets some reassurance. However, for the Federal Reserve, the challenge remains in determining the trajectory for rates going forward. “US inflation coming in line with expectations means no nasty surprises for markets,” said Lindsay James, an investment strategist at Quilter Investors. “The real quandary for the Federal Reserve is what they do with rates from this point.”

Housing costs were a significant contributor to October’s inflation figure, with the Labor Department reporting that housing prices, including rents, climbed 4.9% over the past 12 months. This component, heavily weighted in the consumer price index, accounted for much of the inflationary pressure, highlighting the ongoing challenges in affordability for American families. Car insurance premiums also surged by more than 14% year-over-year, along with increases in healthcare and education costs.

One major exception to the overall price increases was fuel, with petrol prices down by 12% compared to last year, offering some relief at the pump for consumers. However, with inflation still a pressing concern, the issue has remained at the forefront of public discourse and is thought to have influenced recent political dynamics, including President-elect Donald Trump’s victory. Trump’s promises of tax cuts, tariffs, and immigration policies are expected to add further complexity to the economic landscape, possibly driving up costs for both businesses and consumers.

As the Federal Reserve and policymakers monitor these latest developments, economists say a measured approach may be necessary to ensure that inflation remains on a downward trajectory without stalling the economy’s broader recovery.

Indian full-service carrier Vistara will operate its final flight on Monday, marking the end of its nine-year run in the skies. A joint venture between Singapore Airlines and Tata Sons, Vistara is set to merge with Tata-owned Air India, forming a single airline entity that will combine their networks and fleets.

The merger will see all Vistara operations, including helpdesk kiosks and ticketing offices, transferred to Air India. The transition process, including migrating Vistara passengers and their loyalty programmes to Air India, has been underway for several months. According to an Air India spokesperson, meals, service ware, and other aspects of the passenger experience have been upgraded to reflect a blend of both airlines’ offerings.

While Vistara has been praised for its high ratings in food, service, and cabin quality, the decision to retire the brand has drawn criticism from fans, branding experts, and aviation analysts. Vistara’s loyal customer base, known for its appreciation of the airline’s premium in-flight experience, faces uncertainty about whether Air India can maintain these standards.

The consolidation, aviation analysts argue, is primarily driven by the need to address Vistara’s financial losses. Mark Martin, an aviation analyst, suggested that Air India is “being suckered into taking a loss-making airline” and that mergers should strengthen airlines, not merely eliminate losses. However, both Air India and Vistara have seen improvements in their operating metrics, with annual losses reduced by more than half.

Despite these improvements, the merger has been far from smooth. Challenges have arisen, such as pilot shortages leading to flight cancellations and mass sick leave taken by Vistara crew members over salary structure alignments. Complaints about service quality on Air India, including viral videos of malfunctioning seats and entertainment systems, have further compounded concerns.

To address these issues, Tata has announced a $400 million programme to upgrade Air India’s aircraft interiors and has placed orders for hundreds of new planes. However, analysts believe the ongoing “turnaround” is still incomplete, and the merger may complicate the situation.

From a branding perspective, the merger has also raised concerns. Harish Bijoor, a brand strategy specialist, expressed disappointment over the loss of Vistara, calling it a “gold standard for Indian aviation.” He suggested that maintaining Vistara as a distinct brand, with Air India prefixed to it, would have allowed the airline to improve its service standards before absorbing Vistara’s superior offering.

Operational challenges are expected as well, particularly in communication and cultural integration. Passengers may arrive expecting Vistara flights, only to find Air India branding. Moreover, Vistara’s agile workforce may struggle to adjust to Air India’s more bureaucratic systems.

Despite these hurdles, many industry observers agree that the merger was inevitable. With two loss-making carriers under the Tata umbrella, consolidating operations makes financial sense. The combined strength of Air India and Vistara is seen as a better positioning to compete with market leader IndiGo, particularly with Air India’s expanded fleet and workforce.

Ultimately, while the demise of Vistara leaves a void in India’s premium airline market, the future remains uncertain as Air India works to fill that gap. For now, many Vistara loyalists will be watching closely to see if Air India can successfully elevate its service to meet the high standards Vistara once set.