November CPI preview: Inflation likely eased last month, but Fed's job isn't over

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Yahoo Finance

November CPI preview: Inflation likely eased last month, but Fed's job isn't over

Alexandra Semenova · Reporter
Mon, December 12, 2022 at 5:19 PM

Inflation is expected to have slowed again last month, though price increases facing U.S. consumers remain near 40-year highs — even as the Federal Reserve raises interest rates at the fastest pace in decades. ... The Bureau of Labor Statistics' November Consumer Price Index (CPI) is scheduled for release at 8:30 a.m. ET on Tuesday.

Economists surveyed by Bloomberg expect headline prices rose 0.3% over the prior month and 7.3% over last year. In October, inflation rose 0.4% over the prior month and 7.7% over the prior year.

Core CPI, which strips out the more volatile food and energy components of the report, is forecast to come in at 0.3% on a monthly basis and 6.1% over the year, little changed from the 0.3% and 6.3%, respectively, seen during the prior month.

The Federal Reserve keeps a closer eye on "core" inflation, which offers policymakers a more nuanced look at inputs like housing. The headline CPI figure, in contrast, has moved largely in tandem with erratic energy prices this year.

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Bloomberg

Stocks, US Futures Advance as Traders Await CPI: Markets Wrap

Srinivasan Sivabalan
Tue, December 13, 2022 at 4:46 AM

(Bloomberg) -- US index futures and European equities rose amid forecasts inflation in the world’s largest economy will post the lowest figure this year, warranting a less hawkish Federal Reserve.

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US stocks advanced Monday as traders took comfort from economists’ projection for a 7.3% expansion in the US consumer price index for November. If that expectation comes true, it would be the lowest reading in 11 months and the fifth consecutive drop. While that would still leave inflation much higher than the Fed’s target of 2%, it could justify a slowdown in the pace of monetary tightening, with a projected half-point move on Wednesday. However, it also leaves the bar low for disappointment and a selloff.

“Today’s US CPI data will give us an idea on how the market pricing for the Fed’s terminal rate will clash with the dot plot projections that will come out tomorrow, and that will, in all cases, hammer any potentially optimistic market sentiment,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note. “Therefore, even if we see a great CPI print and a nice market rally today, it may not extend past the Fed decision on Wednesday.”

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