Inflation Ticks Up in November, In Line with Expectations

The Consumer Price Index (CPI) increased by 2.7% on an annualized basis in November, according to the Bureau of Labor Statistics. That is consistent with the gain that economists predicted in last month’s data. However, it was a higher reading than the 2.6% headline inflation rate recorded in October. Month-over-month, inflation rose 0.3%, above the 0.2% forecast. Inflation was 0.2% in October.

Core prices, which exclude volatile food and energy categories, rose 0.3% from a month earlier and 3.3% from a year ago, both in line with expectations.

Price pressures have considerably cooled after peaking in the summer of 2022. But while progress had been made towards the Federal Reserve’s 2% goal earlier this year, it has shown significant signs of stalling in recent months.

The CPI report was the last major data point ahead of the Federal Open Market Committee meeting on December 17-18. The data is unlikely to meaningfully alter the committee’s easing path.

Investors are widely expecting a rate cut at the meeting. The probability of a quarter-point interest rate cut was 86.1% ahead of the print, but jumped to 96.4% after the release, according to the CME FedWatch Tool.