Data released on Thursday showed that U.S. consumer inflation pressures remain above the Federal Reserve’s 2 percent policy target, reflecting persistent price gains even as some readings softened. The Consumer Price Index (CPI) for November 2025 rose 2.7 percent year-on-year, slightly lower than earlier forecasts of a 3.1 percent increase, but still significantly above the Fed’s inflation goal. Core inflation, which excludes volatile food and energy costs, increased 2.6 percent YoY, indicating broader price pressures in the economy.
The data release followed market anticipation that inflation would remain elevated and potentially influence the Federal Reserve’s monetary policy outlook for early 2026. Higher-than-expected inflation readings had previously supported expectations that rate cuts might be delayed, while the somewhat softer result lends nuance to Fed decisions about future borrowing cost adjustments.
Economists noted that distortions from a prolonged U.S. government shutdown earlier in the quarter complicated the interpretation of month-to-month comparisons, as regular CPI reporting was disrupted. Traders and analysts are now closely watching how this inflation report, alongside recent labor market data showing mixed signals on employment growth and wage trends, might shape the Fed’s stance at upcoming policy meetings.
Financial markets reacted to the CPI outcome with movements in currency and asset prices, as investors recalibrated expectations for the Fed’s interest rate path and the U.S. dollar’s direction in global markets.