The highly anticipated U.S. inflation data for November has been released: on December 11 local time, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) for November rose 2.7% year-on-year and 0.3% month-on-month; core CPI increased 3.3% year-on-year and 0.3% month-on-month. Although core inflation in November has remained at a relatively high level of 3.3% for three consecutive months, indicating that the inflation challenge in the U.S. persists, overall, the November inflation data met expectations and did not show a significant rebound, which may signal a "green light" for a rate cut by the Federal Reserve in December. In 2024, the Federal Reserve cut rates by 50 basis points and 25 basis points in September and November, respectively.
Boosted by increased expectations of a Federal Reserve rate cut in December, U.S. stocks had mixed results on that day: the Dow Jones Industrial Average edged lower; the S&P 500 index rose, and the Nasdaq Composite Index surged 1.8%, breaking through the 20,000 point mark for the first time, setting a new historical high. On December 12, Asian stock markets subsequently opened higher, and as of 10 a.m. Beijing time, markets in Japan, Australia, South Korea, and other regions showed an upward trend.
Although the overall inflation data for November was relatively stable, the inflation pressure on the Federal Reserve has not eased. Data shows that in November, consumer prices in the U.S., excluding energy and food, are growing at the fastest month-on-month rate in a year and a half, primarily driven by a sharp rise in automobile prices—after the recent devastating hurricanes, drivers are replacing damaged cars and trucks. This upward momentum has raised concerns among economists: many commodity prices had been declining or flat for the year leading up to August; but currently, this trend seems to have reversed.
However, the rate of increase in housing prices slowed down in November compared to the previous month, which is one piece of evidence that U.S. housing prices may continue to slow. Economists have also expressed concerns about persistent inflation in the service sector: healthcare costs in the U.S. rose by 0.4% for the second consecutive month in November. Additionally, President Trump, elected in 2024, is set to take office next year; although he has promised to curb inflation, if he follows through on his threat of tariffs, this will undoubtedly lead to a rebound in U.S. inflation data.
Wells Fargo senior analyst Sarah House stated, "Overall, the environment we are in is that the low-hanging fruit has been picked, and it is becoming increasingly difficult to further curb inflation." A research report released by Open Source Securities on December 12 suggested that the risk of a significant rebound in U.S. inflation may decrease, and core inflation may show some marginal improvement. However, considering that the Federal Reserve is still in a rate-cutting cycle and the uncertainty of policies after Trump's election is high, the volatility of future inflation may increase, making the outlook for U.S. disinflation not optimistic.
Interest rate futures contracts indicate that the probability of the Federal Reserve cutting rates by 25 basis points in December has exceeded 85%. Wall Street investment banks such as Morgan Stanley and Goldman Sachs predict that the Federal Reserve will cut rates by 25 basis points in December; Citigroup, the only Wall Street firm predicting a 50 basis point cut this month, also changed its stance last week to expect a 25 basis point cut in December.