In November, the U.S. inflation rate came in at 7.1%, below the 7.3% year-over-year projection. The monthly rise decreased from 0.4% in October to 0.1% in November.
As rates fell, cryptocurrencies and conventional stock markets soared in reaction. Despite indications of decelerating inflation, interest rates remain high.
The market is anticipating that the Federal Reserve would lower the pace of its recent rate hikes from 75 basis points to 50 basis points on the premise that inflation is experiencing a little respite.
Currency expert at Caxton David Stritch said that although today’s data is unlikely to impact the Fed’s rate decision tomorrow, U.S. core and headline inflation readings will likely set the tone for the central bank and, by extension, the future year.
According to Ipek Ozkardeskaya, senior analyst at Swissquote Bank, “today’s U.S. CPI data will give us a sense of how the market pricing for the Fed’s terminal rate will conflict with the dot plot forecasts that will be released tomorrow, and that would, in all circumstances, crush any possibly bullish market attitude.”
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