Us Inflation In November Drops

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Us Inflation In November Drops

US Inflation In November Drops To 3.1%

As per the data from the U.S.A., the inflation slowed down further in November. The fall in inflation was mostly in line with expectations and will allow the Federal Reserve to adjust its interest policy based on it.

The data showed that headline inflation had moved lower towards 3.1% in November. In October, the reading was near 3.2%, which shows that inflation has changed by -0.1% in one month.

The inflation reading based on MoM showed a jump of 0.1%, while the forecast was for 0.0%. Similarly, Wall Street was expecting the headline inflation to fall towards 3.1%, while the actual reading came out to be 3.2%.

Core Inflation Came Out Near 4%

If we look at the core inflation, which doesn't include energy/food prices, it showed an increase of 4% on a yearly basis. In addition, the core inflation on a monthly basis showed an increase of 0.3%, which was a little higher than the October's reading of 0.2%.

The recent inflation print will play a key role in how the Fed shapes its interest rate policy in the next few months. Some experts believe that borrowing costs in the USA will start to go down starting in 2024. However, the Fed chair has already issued a statement that a careful approach is needed to control inflation.

In the next few days, we will have the next policy decision from the Fed. According to experts, the interest rates will remain the same year (5.25 - 5.50%). The Fed is also expected to publish its 'dot plot', which will showcase how the rates will be in the near future.

According to one expert, the recent report will not impact the long-term game plan of the Federal Reserve. In simple words, the markets will need to wait a lot more before moving towards rate cuts.

After the announcements, the forecasts of rate cuts during March 2024 have dropped down significantly. As a result, there's now a 50% chance of rate cuts at the May 2024 meeting.

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