Inflation rose as expected in November according to fresh Consumer Price Index (CPI) data, which was in line with expectations at 2.7%, a 0.3% month-over-month rise.
Experts are quoting this headline as “frustrating” but not alarming, while some investors widely expect the US central bank to cut borrowing costs by a quarter percentage (25 bps) point next week after a new report showed inflation rose in November in line with expectations.
What to expect in the next CPI data report?
As measured by the CPI, inflation in the US is expected to increase at an annual rate of 2.7% in November, slightly higher than the 2.6% growth reported in the previous month. Core annual CPI inflation, which excludes volatile food and energy prices, is projected to remain steady at 3.3% during the same period.
Nasdaq soars over 20k, Tesla Hits Record High in 3 Years
Large-cap technology stocks were mostly up on Wednesday, led by Google parent Alphabet (GOOGL) and EV maker Tesla (TSLA), which rose 5.5% and 5.9%, respectively. Also Nvidia (NVDA) rose 3.1%, while Microsoft (MSFT), Amazon (AMZN), and Meta (META) all finished solidly higher. Apple (AAPL) hit an all-time high on Wednesday but finished 0.5% lower.
Market participants are now pricing in a 99% chance of a 25 bps rate cut next week.
Expert Expecting Rate Cut of 25 Basis Points (Bps)
While the Federal Reserve is widely expected to cut its key interest rate next week, determined inflation may force the central bank to limit further cuts next year.
While the majority of big sources, like J.P. Morgan, are expecting a rate cut, there is still some pessimism about it as CPI inflation is well above the Fed’s goal of 2%.
Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million, changed little in November. These measures are higher than a year earlier, when the jobless rate was 3.7 percent, and the number of unemployed people was 6.3 million.
7k