US inflation rose slightly in November, reaching 2.7% from 2.6% the previous month. While this modest increase may not deter the Federal Reserve from cutting interest rates later this month, it signals potential challenges in achieving the 2% inflation target.
Annual inflation increased to 2.7% in November, rising modestly above the 2.6% annual inflation rate of the previous month, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS). Inflation increased 0.3% on a monthly basis in November following four months of registering 0.2% monthly increases, according to BLS.
The cost of housing was the most significant contributor to the monthly increase in November, accounting for nearly 40% of the monthly increase in all items. The price of food also increased by 0.4% in November. Energy prices rose 0.2% after being unchanged in October. For now, the modest jump in inflation isn't expected to dissuade the Federal Reserve from cutting interest rates later this month. However, it does signal that the central bank may face an uphill battle in getting inflation to the 2% target rate, which may impact rate cuts in the New Year, according to Jim Baird, chief investment officer with Plante Moran Financial Advisors. 'The real questions relate to what comes next,' Baird said in a statement. 'The path for 2025 is less clear, but a course correction by the Fed toward holding rates a bit higher for a bit longer appears increasingly probable.' Last month, the Fed announced a highly anticipated quarter-point cut, lowering interest rates to 4.5% to 4.75%. Although inflation has moderated substantially over the last two years from a peak of 7% to 2.6%, Fed Chair Jerome Powell said that the Fed remains committed to returning inflation to its 2% goal. 'Inflation continues to weigh down the wallets of the average American family, along with persistently high interest rates impacting everything from credit card spending to mortgage refinancing,' Gabe Abshire, CEO of Move Concierge, said in a statement. 'While the Fed will likely cut interest rates again next week, it will still take time before this will bring household costs down.
INFLATION FEDERAL RESERVE INTEREST RATES CONSUMER PRICE INDEX ECONOMY
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