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U.S. consumer prices rose at an annual rate of 2.7% in November, putting inflation above the Federal Reserve's 2% target. Traders expect the federal funds rate to be cut by a quarter of a percentage point at the next Federal Reserve meeting.
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New November CPI data released on Wednesday showed consumer prices rose as expected, especially since the November jobs report released earlier this month showed solid job growth. The Fed remained on track to cut interest rates next week.
According to Bureau of Labor Statistics data released Wednesday, the consumer price index rose 0.2% from a month earlier, matching both the October increase and economist expectations.
Core CPI, which excludes volatile food and energy prices, rose 0.3% from October to maintain an annualized rate of 3.3%, in line with analyst expectations.
The inflation report comes as markets widely expect the Fed to cut interest rates at its Dec. 17-18 meeting. Traders are pricing in an 86% chance that the federal funds rate will be cut by a quarter of a percentage point, according to CME Group's FedWatch tool.
The employment statistics for November showed a steady increase of 227,000 people, further solidifying the basis for monetary easing. The numbers exceeded expectations and signaled a solid recovery from last month's lackluster performance.
This number not only exceeded the Dow Jones consensus estimate of 214,000 jobs, but also reflected upward revisions to employment growth in October and September, with the three-month average The number of people increased to 173,000.
Inflation has slowed significantly from a peak of about 9% in June 2022, but recent data suggests prices have stabilized above the Fed's target.
Bitcoin traded above $98,000 before the inflation data was released, recovering from a recent dip below $94,000. According to data from CoinGecko, the cryptocurrency has gained 2% in the past seven days.
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