Notable price declines included the communication index (-1.0%), indicating deflation in select sectors. Overall, November marked the first time in five months that inflation accelerated, signaling persistent pricing challenges.
What Does This Mean for Federal Reserve Policy?
The Federal Reserve’s decision-making is under scrutiny as inflation remains above its 2% target. Markets largely expect the central bank to reduce its benchmark interest rate by 0.25% at the December 18 meeting. However, some Fed officials have expressed concerns about the resilience of inflation and suggested a cautious approach to future rate cuts. Should the Fed proceed, it will have trimmed rates by a full percentage point since September.
Despite rate cuts, inflation’s stickiness in categories like shelter (+4.7% annually) and motor vehicle insurance (+12.7% annually) could limit the central bank’s flexibility in easing monetary…
Read More