Inflation Stalls, Attention Shifts to the Fed

US CPI News: Inflation Slows but the Fed Isn’t Shutting Up

What the Numbers Tell Us (and Why it’s probably no big deal)

Headline inflation: up 2.7% YoY in November – the highest since July, but exactly what the experts predicted.
Core inflation: 3.3% YoY – third straight month of steady climbing.
Month‑on‑Month: both headline and core CPI rose 0.3%, meeting expectations.

Despite the back‑and‑forth roller‑coaster, these figures aren’t expected to shake up the near‑future policy stance of the Federal Open Market Committee (FOMC). The main takeaway? The Fed is sticking to its guns.

The Labor Market: The Real Driver of Fed Action

When inflation data looks shaggy, the labour market pulls the lever. A surprising rise in unemployment to 4.2% in November – highlighted in the latest jobs report – keeps the 25‑basis‑point cut at the table for next week’s final meeting of the year.

Looking Ahead: Two‑Sided Risks in 2025

Inflation upside risk: new tariff plans from President Trump and a more stimulant fiscal stance could push price pressures higher.
Reflation threat: strong demand may keep the economy hot, keeping the Fed on its toes.
Labour market tightness combined with these risks might prompt the Fed to skip a rate hike in either January or March.

In sum, the pathway to neutral rates (around 3%) will be a slower, more measured crawl. The aggressive “Fed Put” of 2024 will likely ease, giving equities a modest pushback but still leaning toward a positive trajectory.