November’s Consumer Price Index (CPI) report is set to be released on Tuesday, with investors expecting the index to show a deceleration in inflation. According to estimates gathered by Bloomberg, analysts expect November’s CPI report to show a 3.1% gain in annual prices, down from October’s 3.2% rise.
Bank of America has suggested that lower energy prices have helped to limit a rise in headline inflation on an annual basis. The bank expects a 3.5% decline in energy prices on a month-over-month basis; more than the 2.5% drop in October. On a “core” basis, which excludes volatile food and energy components, inflation is expected to have risen by 4% on an annual basis; in line with October. Monthly core prices are expected to have risen 0.3%, slightly exceeding the 0.2% increase seen in October.
While inflation remains significantly higher than the Federal Reserve’s 2% target, markets are not expecting the central bank to raise interest rates at its upcoming policy meeting. Fed governor Christopher Waller commented last month that he’s “increasingly confident” that interest rates are at the required level to fight off inflation.