The latest Consumer Price Index (CPI) report for November revealed a mixed inflation picture.
What Happened: Headline inflation eased slightly, as expected, but core prices held steady, likely indicating some friction in the ongoing disinflation trend.
Economists and market analysts weighed in on what these figures mean for the Federal Reserve’s policy trajectory and financial markets.
Key CPI Data Highlights
Annual Headline CPI: Eased to 3.1% in November, down from 3.2% in October, as expected.
Monthly Headline CPI: Increased by 0.1%, slightly above expectations of a flat reading
Annual Core CPI: Remained steady at an annual rate of 4%, as forecasted.
Monthly Core CPI: Advanced at a 0.3% pace, up from October’s 0.2% and in line with expectations.
NorthEnd Private Wealth‘s Alex McGrath expects the Federal Reserve to maintain its firm stance against it. The chief investment officer also says Fed Chair Jerome Powell will likely reiterate how the battle against inflation is not over.
Concerns about consumer health remain. U.S. households are already grappling with soaring credit card balances and historically high-interest rates. McGrath also questions the sustainability ofcurrent stock marketvaluations and the Fed’s strategy for managing its sizable balance sheet.
The Kobeissi Letter pointed out how inflation remains high when it comes to car insurance, transportation, and housing. This poses a continued challenge to consumers and policymakers.
Car insurance (19.2%)
Transportation (10.1%)
Rent (6.9%)
Food away from home (5.3%)
The “Core Services Ex Housing Inflation,” a measure highly watched by Fed officials, jumped 0.44% in the past month, corresponding an annual rate of approximately 5.3%, significantly higher than the headline CPI. Therefore, they do not expect any imminent Fed dovish shift.
Think we are ready for a “Fed pivot?”Here’s why you should think twice:Fed Chair Powell has often pointed to “Core Services Ex Housing Inflation” as the “most important category” to watch.In the latest CPI report, Core Services Ex Housing Inflation jumped 0.44% over the… pic.twitter.com/4Oi7fnj6TP
— The Kobeissi Letter (@KobeissiLetter) December 12, 2023
Kathy Jones, chief fixed income strategist at Schwab Center for Financial Research, saw the CPI trending lower, but she…
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