From Morningstar: 2024-12-12 04:32:38

The November Consumer Price Index (CPI) report showed a slight increase in inflation, rising 2.7% from the previous year and 0.3% from October. Core CPI, excluding food and energy costs, rose 3.3% annually and 0.3% monthly. This data may influence the Fed’s decision on interest rates at their upcoming meeting.

Morningstar’s Preston Caldwell believes the latest CPI data could spark debate at the Fed’s December meeting on whether to cut rates. Rising inflation above the Fed’s target could complicate the decision. Food prices increased 0.4% in November, while gasoline prices rose 0.6%, reversing a recent trend of falling gas prices.

Shelter prices continued to rise but at a slower pace in November, contributing to overall inflation. Rising consumer spending and demand for items like cars and furniture may be fueling inflation. Despite strong jobs data and inflation, investors still anticipate a 0.25% rate cut at the upcoming Fed meeting, though the outcome remains uncertain.

Investors are expecting a 0.25% rate cut from the Fed, bringing interest rates down to 4.25%-4.50%. However, with mixed signals from the economy and uncertainty around inflation, the decision is less clear. Markets are heavily pricing in a rate cut, but some analysts see the outcome as a toss-up.



Read more at Morningstar: US Rate Cut in the Balance as Inflation Stays Sticky