November CPI: Moving on to 2024

Source: Economics Group of Wells Fargo Bank, N.A. Summary The November CPI report was relatively uneventful. Falling gasoline prices and modest food inflation restrained the headline CPI to just a 0.1% increase in the month. Excluding food and energy prices, core CPI was up 0.3%, in line with consensus expectations. Core goods prices continued to decline even as the drivers of the dip changed, while core services inflation was a bit stronger in November compared to October due to faster inflation for shelter, medical care and transportation. The November CPI data probably do not move the needle much for the FOMC this week. Doves looking for a downside surprise did not see one materialize, but a nasty upside shock was also avoided. Looking through the month-to-month volatility, inflation continues to move back toward the Fed’s 2% inflation target. That said, price growth remains far enough away from 2% that the central bank likely will not declare victory just yet. We suspect the FOMC will keep monetary policy in a holding pattern and look toward the Q1 labor market and inflation data to determine its next move. Our base case for the first rate cut remains June 2024. READ FULL ARTICLE >>