Key Economic Events: November CPI Report Reveals 4% Core Inflation and Market Sentiment
The U.S. Bureau of Labor Statistics is set to release the CPI inflation report for November, with expectations of a 0.3% month-over-month increase in core CPI and a 4% year-over-year increase. However, concerns arise as core CPI has consistently remained above 3%, well above the Fed's 2% inflation target. The disinflationary process is continuing, with food and rent inflation moderating, but services inflation remaining sticky. The market is pricing in cuts, but the current inflation data supports "higher for longer" interest rates. This suggests a tough environment of stagflation, with growth likely to decelerate while inflation stays above 3%.