In an exclusive interview with Fox Business’ Edward Lawrence, Federal Reserve Bank of San Francisco President Mary Daly talks about the next rate decisions, keeping the economy in good shape and the potential impacts from a second Trump administration.
inflation increased Consumer prices remained high again in November, leaving Federal Reserve policymakers with new data to consider ahead of next week’s meeting, when another interest rate cut could be announced. .
The Labor Department said on Wednesday that Consumer Price Index (CPI) Cost of living – a broad measure of the cost of everyday items such as gasoline, groceries and rent – ​​rose 0.3% in November, compared with a 2.7% gain on an annual basis.
Those figures were in line with the expectations of economists surveyed by LSEG. Both the headline rate and monthly price growth figures were up compared to October’s readings, which were 2.6% and 0.2%, respectively.
So-called core prices, which exclude more volatile measures of gasoline and food to better assess price rise trends, were up 0.3% on a monthly basis in November and up 3.3% from a year earlier — both readings from the previous month. Were unchanged from.
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Inflation had increased by 2.7% on an annual basis in November. (Scott Olson/Getty Images/Getty Images)
The report revealed inflationary pressure The U.S. economy remains in recession despite progress over the past year in bringing inflation closer to the Federal Reserve’s 2% target.
High inflation has created severe financial pressure for most American families, who are forced to pay more for everyday needs like food and rent. Price increases are especially difficult for low-income Americans, because they spend more of their already inflated paychecks on necessities and have less flexibility to save money.
Housing costs accounted for nearly 40% of the headline CPI gain in November, as the index for shelter rose 0.3% on a monthly basis. Shelter prices are up 4.7% from last year.
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energy prices They also rose 0.2% in November after being unchanged the previous month, and were 3.2% lower than a year earlier. Gasoline prices rose 0.6% on a monthly basis but are down 8.1% from a year earlier. Electricity costs fell 0.4% in November but rose 3.1% on an annual basis.
Food prices were also higher in November, up 0.4% for the month and 2.4% from last year. The cost of food at home was up 0.5% on a monthly basis and 1.6% from a year earlier. Meals away from home increased 0.3% this month and were up 3.6% from last year.
prices for Meat, poultry, fish and eggs were up 1.7% for the month and 3.8% from a year earlier. Egg prices rose 8.2% in November and are 37.5% higher than last year due to the bird flu outbreak.
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Auto insurance prices are 12.7% higher than a year ago. (Keith Birmingham/MediaNews Group/Pasadena Star-News via Getty Images/Getty Images)
Prices for transportation services were stable on a monthly basis but are 7.1% higher than a year ago. auto insurance There has been an increase of 12.7% on an annual basis, although it has increased by only 0.1% compared to the previous month. Motor vehicle repair costs rose 0.5% this month and are 7.8% higher than last year.
Postal and delivery services are up 9.8% from a year earlier, despite a 0.1% decline in November. Postal costs have increased by 10.6% on an annual basis while delivery services have increased by 4.4%.
The data comes like this federal Reserve The meeting is scheduled to take place next week when policymakers are expected to announce a 25 basis point cut in interest rates.
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Despite headline inflation rising relative to recent readings, the market does not expect the Fed to stop cutting rates. As of Wednesday morning, traders see a 97.9% chance of a 25 basis-point cut at the Fed’s December meeting, according to the CME FedWatch tool – up from 88.9% a day earlier.
“CPI was slightly higher than expected but the underlying details were more favorable,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Higher prices for new and used vehicles point to the impact of the lingering storm on demand and supply, while housing costs saw the smallest increase since 2021. The data set the Fed on a path to a more economic recovery next week.” ‘All clear’ has been given, and today’s inflation figures for January cut into active discussion.”
