Inflation in the US in November came in exactly as expected by economists in advance.
It was previously expected that price growth would be lower in November than in October. Photo: FREDERIC J. BROWN / AFPPublished:
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The fresh inflation figures from the US are the last important figure release before the US central bank (Fed) holds an interest rate meeting on Wednesday.
Core inflation Core inflation The price increase excluding energy goods and tax changes, which is the most important inflation figure when the Fed assesses interest rates, came in at 4 per cent for November.
It is unchanged price growth from October, and it is exactly what economists had expected in advance, according to Bloomberg’s estimates.
The general increase in CPI inflationCPI inflationPrice increase measured by an increase in the consumer price index (CPI). of 3.1 per cent in November is only a slight decrease compared to the price increase of 3.2 per cent for October.
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– You must not be too hard on yourself in this job
– It was very close to the expectations for everything here. What has kept inflation up is rent. And it doesn’t give up, says chief economist Harald Magnus Andreassen at Sparebank 1 Markets to E24.
High wage growth
It is widely expected from the market that the Fed will choose to keep the key interest rate unchanged when they meet on Wednesday.
The interest rate level in the US has been stagnant since July at the range of 5.25-5.50 per cent, the highest interest rate level in 22 years.
Andreassen believes that the underlying inflation has not really come down since this summer.
– That is one of the Fed’s problems. The second is that the wage indicators are now bursting, but it is not clear that wage growth has come down enough, says the chief economist.
Chief economist Harald Magnus Andreassen does not believe in rapid interest rate cuts in the US next year. e Photo: E24
Expect unchanged interest rate
The market has priced in a 98.4 percent probability that the interest rate level will still be in the 5.25-5.50 interval when the interest rate meeting on Wednesday is completed, according to CME FedWatch– the tool.
Since it is widely expected that the interest rate will be kept calm, there is more excitement about what signals the Fed and central bank governor Jerome Powell will give on Wednesday.
The market is pricing in between four and five interest rate cuts in 2024, says the chief economist.
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199,000 new jobs created outside agriculture in November
– The Fed is not going to live up to expectations of a rapid series of interest rate cuts next year. The interest rate path they are putting forward will at best imply two hikes, and perhaps only one, says Andreassen.
At the interest rate meeting in November, Powell expressed that economic activity in the US was still stronger than expected.
In the months before, several key figures had come in stronger than expected, among them labor market figures – all this despite the repeated interest rate hikes.
2023-12-12 13:30:17
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