Rate cuts remain on the cards despite stubborn core inflation – London Business News | Londonlovesbusiness.com

Annual inflation rose to 2.7%, from 2.6% in October and US MoM inflation rose to 0.3% from 0.2% October, the highest rate since April.

Annual core inflation (excl. energy and food) held at 3.3% in November, in line with expectations.

US MoM core inflation also held steady at 0.3% in November for the fourth consecutive month.

Isaac Stell, Investment Manager at Wealth Club said, “Annual US inflation rose again in November to 2.7%, with US MoM core inflation remaining stubborn at 0.3% for the fourth month in a row. Despite the small uptick in the year-on-year inflation rate, markets are pricing in an almost certain 0.25% rate cut at the Fed’s December meeting.

“The question now is whether the Fed delivers the hattrick of rate cuts markets are expecting in spite of the US’s booming economy and a jobs market that saw a return to solid growth in November.

“If the Fed cuts next week, we expect to see a pause in the new year as policymakers start to get a clearer picture of the inflationary risks from President-elect Trump’s expansionary fiscal policies and tariff plans which could further stoke price pressures.”