What to Expect From This Week’s Inflation Report | Global News Avenue

Inflation has been little changed in recent months and this trend is likely to continue in November.

The Bureau of Labor Statistics’ inflation report on Wednesday is likely to show that the consumer price index, which measures the cost of living, rose 2.7% in the 12 months to November, according to a survey of economists. Dow Jones Newswires and wall street journal.

That would be up from October’s 2.6% annual rate and the highest inflation rate since July, marking a setback in the Fed’s efforts to bring inflation down to 2% annually and keep it there.

Progress in the fight against inflation has stalled in recent months, in stark contrast to a marked slowdown in price rises earlier this year. Annual CPI declined month by month from March to September, but accelerated again in October. Housing costs are a major factor Prevent inflation from cooling to pre-pandemic levels, and economists expect the November data to do the same.

“We do not expect major surprises on the inflation front, but the Fed’s ultimate effort to achieve its 2% inflation target will be bumpy,” Moody’s Analytics’ Dante D’Antonio and other economists wrote in a commentary.

Moody’s economists also expect energy costs to lead to higher overall inflation. Forecasters at Goldman Sachs are driving the trend by expecting prices for used cars, airline tickets and auto insurance to all rise.

The Fed is paying attention

Wednesday’s report will be fresh in the minds of Fed policy committee officials when they meet on Dec. 17-18 to set the nation’s monetary policy.

financial markets are Bet the Fed will cut interest rates benchmark interest rates at the time, but higher-than-expected inflation could undermine those expectations. Stubborn inflation could also dim prospects for further rate cuts over the next year.

The Fed is setting its influence federal funds ratewhich affects borrowing costs for various loans to curb inflation while preventing unemployment from soaring. The Fed began cutting interest rates in September after holding them at two-decade highs for more than a year as officials became more confident that inflation was falling and grew more concerned about the direction of the job market.

Since then, the labor market always remain flexible And inflation remains high. Waller, a member of the policy committee and Fed governor, said in a speech last week that he was paying close attention to the inflation data, but that Don’t want to “overreact” Prices rose in October.