U.S. consumer inflation rose for the second consecutive month in November, complicating the Federal Reserve’s decision-making on interest rates.
According to data from the Labor Department released on Wednesday, the consumer price index (CPI) increased by 2.7 percent compared to a year ago, slightly up from 2.6 percent in October. This matched economists’ median forecast.
The uptick adds to the challenges the Fed faces in bringing inflation down to its long-term target of 2 percent, potentially slowing the pace of future rate cuts.
The U.S. central bank recently began lowering interest rates from a two-decade high, with its benchmark lending rate now between 4.50 and 4.75 percent, a reduction of 0.75 percentage points since September.
Financial markets widely expect the Fed to cut rates by another quarter point next week, according to CME Group data. While inflation had slowed for much of this year, falling to 2.4 percent year-on-year in September, it has recently reversed course.
Despite this uptick, most analysts and Fed officials still believe that inflation’s overall trajectory remains downward in the long run. Core inflation, which excludes volatile food and energy prices, came in at 3.3 percent in November, in line with expectations. Both headline and core inflation rose by 0.3 percent month-over-month, also meeting forecasts.
