The latest numbers from the Labor Department show Consumer Price Inflation (CPI) cooled down to 7.1% for the month of November. the figure came in lower than the Street’s expectations of 7.3%.
Gains in shelter outweighed decreases in energy. Further, while food saw a modest increase, gasoline, natural gas, and electricity all declined amid the most aggressive interest rate cycle by the U.S. Federal Reserve in about three decades.
Core CPI, which excludes energy and food prices, rose 0.2% in November, moderating to 6%. This was its smallest increase since August 2021.
Today’s numbers hint the Fed’s tactics are working and are probably what it was looking for. Further, today’s print could set the tone for 2023.
The central bank has indicated it could keep raising rates to rein in stubborn inflation and a rate hike of 0.50% is widely expected tomorrow.
Importantly, market participants will keep an eye on the Fed’s rate projections tomorrow, as well as Chairman Jerome Powell’s views, who recently opined that the time for a moderation of rate increases could come in the meeting tomorrow.
Broader indices are already up between 2% and 4% today while yields are taking a tumble and a large portion of cash sitting on the sidelines could tumble back into the market.
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