In November, the U.S. Consumer Price Index (CPI), a principal measure of inflation, registered a modest rise of 0.1%, maintaining a consistent annual increase of 3.1%. This minor growth in prices reflects subtle economic shifts, with energy costs witnessing a marked reduction, in contrast to the gradual rise in expenses for housing and food.

U.S. Inflation Rate Holds Steady: Minor CPI Rise Amid Falling Energy Costs

The data released on Tuesday by the U.S. Bureau of Labor Statistics highlighted a significant 2.3% fall in energy prices. This decline, led by a 6% drop in gasoline and a 2.7% fall in fuel oil prices, played a pivotal role in moderating the overall inflation rates. The latest inflation figures had a subdued effect on Wall Street, as major stock indexes exhibited little fluctuation in early trading. Similarly, the cryptocurrency markets and precious metals sectors remained largely unaffected.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in November on a seasonally adjusted basis, after being unchanged in October, the U.S. Bureau of Labor Statistics reported today,” the inflation report notes. “Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment.”

The Federal Reserve is likely to sustain its present interest rate stance, a decision significantly swayed by the recent CPI statistics. While some market forecasts indicate a pause in rate hikes, with potential reductions envisaged in the future, Fed analyst Jim Grant predicts persistently high rates, not foreseeing a reduction in the near term.

The Federal Open Market Committee (FOMC) is scheduled to convene on Dec. 13, 2023, with market anticipations currently not favoring a change in rates. There’s a 98.4% probability that the federal funds rate will stay constant, with only a slim 1.6% likelihood of an increase on Wednesday, according to the CME Fedwatch tool.

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