Catenaa, Thursday, December 18, 2025- Inflation pressures eased more than expected in November, official data showed on Thursday, as bets on a rate cut next month fell to 25%.
The Bureau of Labor Statistics said that the Consumer Price Index (CPI) rose 2.7% over the prior year in November, less than the 3.1% increase that had been expected by economists, according to Bloomberg estimates.
On a “core” basis, which strips out the more volatile costs of food and energy, prices rose 2.6% over the prior year in November. Economists had also expected to see a 3.1% increase in core prices.
The data marked the first inflation reading since November, with October’s report canceled as a result of the government shutdown. This also meant Thursday’s report offered no month-on-month comparisons for consumer prices.
In September, the last month for which there is inflation data, both the headline and core CPI measures rose 3% from the same month last year.
The Federal Reserve targets 2% inflation, as measured by the core personal consumption expenditures (PCE) index, which is released by the Bureau of Economic Analysis in the final week of each month.
The latest core PCE data, which was collected in September and released earlier this month, showed prices rose 2.8% over the prior year.
This inflation data is likely to keep the Fed on the sidelines at the end of its January meeting, with traders currently pricing in a roughly 25% chance the central bank cuts rates next month.
Last week, the Fed’s forecasts suggested it would cut rates only one more time in 2026 after cutting rates by 0.25% at three straight meetings to end 2025.
