US inflation rose 7.1% y/y in November, which is slightly lower than the expected 7.3%. The repoort said this was the smallest 12-month increase since December 2021.
Similarly, core consumer prices, which excludes energy and food price volatility, gained 0.2% instead of 0.3%. This pushed core inflation up by 6.0% for the year.
Dollar fell in response to this inflation data.
Economists note that the data gives the Federal Reserve the opportunity to slow the pace of rate hikes in 2023, especially since a 50 basis point increase is already expected this Wednesday. Markets are wondering if the Fed sees rates peaking in 2023.
Looking back at the report, housing costs made the largest contribution to inflation, followed by food prices, which rose 0.5%. Energy prices, meanwhile, fell by 1.6%.
The energy index is up 13.1% over the last 12 months and the food index is up 10.6% year on year.
