Fed: 50 bps are practically a done deal after US inflation confirms downtrend – Commerzbank

US consumer prices rose by only 0.1% in November. The easing of inflationary pressure is likely to prompt the Fed to slow the pace of interest rate hikes, economists at Commerzbank report.

US inflation continued its downward trend in November

“US consumer prices rose by 0.1% in November compared with October. This was below expectations. Excluding energy and food, the increase was 0.2%, also less than forecast. The YoY rate of the CPI covering all goods, which had stood at 9.1% in June, fell to 7.1%, and that of the index excluding energy and food from 6.3% to 6.0%.”

“The 50 basis points hike, which is generally expected for tomorrow’s FOMC meeting, can be considered almost certain after today’s data.”

“We continue to assume that the Fed will reduce the size of the rate hikes again at the beginning of 2023, moving by only 25 bps in February and March.”