US inflation rises to 2.7% in November, Fed cut still likely
Make us a preferred source
Make us a preferred source on Google
The news: US inflation rose to 2.7% in November, up from 2.6% in October, according to the Bureau of Labor Statistics.
The numbers: Monthly CPI increased by 0.3%, matching economists' forecasts. Core CPI, which excludes food and energy, also climbed 0.3% for the month and 3.3% annually.
Shelter costs, accounting for nearly 40% of the CPI rise, recorded their smallest monthly increase since 2021. Food, vehicles and medical care also contributed to price increases, the data shows.
The context: Markets responded with a slight uptick in stock futures, while Treasury yields dipped slightly.
The data comes as Federal Reserve officials prepare to meet for the last time this year and before Donald Trump’s incoming second administration, to attempt to calibrate a “neutral” rate that supports the labour market but also keeps inflation in check.
Derivative markets after the BLS release showed traders were almost fully pricing a 25-basis point rate cut at the Fed’s 17-18 December meeting, according to CME Group’s FedWatch tool.
Last Friday, data showed the labour market rebounded last month from October’s disruptions, though unemployment rose to 4.2%.
What they said: “November’s sturdy core CPI reading will inflame worries among the FOMC minority that disinflation has stalled,” Bloomberg Economics’ Anna Wong said.
“True, housing-rent inflation finally stepped down — as market rents have long suggested — but goods prices have lost disinflation momentum.”
“The current monthly inflation pace is consistent with an annual inflation rate above 3%, not with the Fed’s 2% target.”
The sources: US Bureau of Labor Statistics, Bloomberg
