"November Inflation Cools, Easing Pressure on Fed and Stocks"

The November Consumer Price Index (CPI) report is expected to show a slight deceleration in headline inflation to 3.1%, with energy prices likely contributing to the smaller gain. Bank of America predicts a 3.5% month-over-month drop in energy prices, driven by lower gas prices. On a "core" basis, which excludes food and gas, prices are expected to have risen 4.0% over last year. Despite inflation remaining above the Federal Reserve's target, investors are betting that the central bank will not raise rates in December, with a nearly 100% chance of rates remaining unchanged. Bank of America expects the first rate cut to come in June, while the market is pricing in a roughly 40% chance of a rate cut at the March meeting.