US inflation rose to 2.7% in November

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US inflation rose to 2.7 per cent in November, as the Federal Reserve weighs how quickly to proceed with interest rate cuts.

This number was in line with the expectations of economists surveyed by Bloomberg, but it was higher than the October rate of 2.6 percent.

Data released by the Bureau of Labor Statistics on Wednesday confirm concerns about flat inflation after the previous increase in October.

Next week, the Fed is widely expected to cut interest rates for the third time in a row by a quarter of a percentage point, but the path next year is less certain, as the central bank grapples with its dual mandate to keep inflation near 2 percent and maintain a healthy level. . Labor market.

On a monthly basis, prices rose by 0.3 percent.

Once food and energy prices are excluded, the core CPI rose 0.3 percent during the month, or 3.3 percent year-over-year.

US stock futures continued to gain slightly after the data was released. Contracts tracking the Standard & Poor’s 500 index rose 0.3 percent, while contracts tracking the technology-rich Nasdaq 100 index rose 0.4 percent.

Government bonds were weak, with policy-sensitive two-year Treasury yields steady at 4.15 percent.

Market prices on Wednesday indicated that investors were still betting on a quarter-point Fed cut next week, which would take interest rates to a new target range of 4.25 to 4.5 percent.

Officials have discussed slowing the pace of cuts as interest rates reach a more “neutral” position, high enough to keep inflation under control but low enough to protect the labor market.

They claim that if they move too quickly, inflation could remain above their 2 per cent target, but moving too slowly could risk a sharp rise in the unemployment rate.

Job growth rebounded sharply in November after being hit by hurricanes and strikes the previous month.

However, the unemployment rate rose to 4.2 percent, suggesting that the labor market acceleration was not strong enough to risk reigniting inflation.

Economists add that while price pressures remain high in housing-related service sectors, they are expected to stabilize over time.

Some officials in the outgoing Biden administration have expressed concern that President-elect Donald Trump’s policies will hurt the economy after he returns to the White House next month.

US Treasury Secretary Janet Yellen said this week that the sweeping tariffs proposed by Trump could “hinder” progress in taming inflation.

“(Tariffs) will have a negative impact on the competitiveness of some sectors of the U.S. economy, and could significantly raise costs for households,” she said at an event hosted by The Wall Street Journal.