U.S. Consumer Prices Rise Slightly in November, Supporting Expectations for Fed Rate Cut

U.S. consumer prices edged up slightly in November on an annualized basis, aligning with expectations and reinforcing the likelihood of another interest rate cut by the Federal Reserve next week.

The Consumer Price Index (CPI) published by the Labor Department rose by 2.7% year-over-year in November, marginally higher than October’s 2.6%. This figure was in line with market forecasts.

On a monthly basis, CPI climbed 0.3%, surpassing October’s 0.2% increase, again meeting expectations.

Excluding volatile categories such as food and energy, the “core” CPI increased by 3.3% over the past 12 months, consistent with projections. Month-on-month, core inflation ticked up by 0.3%, maintaining the same pace as in October.

Since September, the Federal Reserve has reduced interest rates by a total of 75 basis points. Markets widely anticipate an additional 25-basis-point cut during the Federal Open Market Committee’s (FOMC) meeting on December 17-18.

The Fed’s most recent quarterly projections, released in September, revealed a median forecast for the federal funds rate to end 2025 at 3.4%, suggesting a cumulative 125-basis-point reduction from current levels.