US interest rate expectations witnessed major changes during trading on Wednesday, after the release of inflation data for last November, which showed an increase in the inflation rate to 2.7%, which may increase the Federal Reserve’s caution about inflation rising again.
According to the data received, the annual inflation rate in the US consumer price index recorded about 2.7% last October, in line with market expectations that it would record about 2.7%, while the previous reading recorded about 2.6% last October.
As for the US core inflation rate, the index (which excludes energy and food prices) recorded about 3.3% on an annual basis by the end of November, which is consistent with expectations and the previous reading, which indicated that inflation recorded about 3.3% last October.
After the data was released, US interest rate expectations witnessed major shifts, as the FedWatch tool showed an increase in expectations of a 25 basis point rate cut, which rose to about 97.9%.
In contrast, expectations for keeping interest rates unchanged fell to around 2.1%. This indicates that markets are now anticipating a possible rate cut at the Fed’s scheduled meeting in December, reflecting the expected shifts in monetary policy to address economic challenges.