U.S. inflation pressures slowed again in November, but core price pressures held steady for a second month, potentially enabling the Federal Reserve to maintain its “higher-for-longer” interest-rate stance well into 2024.
The headline consumer price index for November was pegged by the Commerce Department at 3.1%, slowing modestly from the prior month’s tally of 3.2% and matching Wall Street’s consensus forecast. The figure was powered in part by falling oil and energy prices.
On a monthly basis, inflation edged 0.1% higher, compared with unchanged readings in October and September and the 0.6% gain tallied in August.
So-called core inflation, which strips out volatile components like food and energy, held at 4%, the lowest in two years, while the monthly reading of 0.3% also matched Wall Street forecasts.
U.S. stocks extended modest gains following the data release with futures contracts tied to the S&P 500 indicating a 9-point opening-bell gain while those tied to the Dow Jones Industrial Average suggested a 125-point advance. The tech-focused Nasdaq was called 60 points higher
Benchmark 10-year Treasury note yields were little-changed at 4.193% while 2-year notes were pegged at 4.67%, 2 basis points (0.02 percentage point) lower from prior to the data release.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.42% lower at 103.656.
CME Group’s FedWatch has long discounted the chances of a Fed rate move later this week in Washington, but pegs the chances of a quarter-point cut in March at around 47.4%.
Bets on a May reduction, meanwhile, leaped to 79.3% from just 33% only a month ago.
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