- The US consumer price index (CPI) rose 0.1% in November and 6% from 2021
- CPI moderates to an annual pace of 7.1% last month, lower than expected 7.3%
- Latest data demonstrates a slowdown in inflation with the smallest monthly increase in more than a year
- Figures indicate a reduction to the pace of interest rate hikes
Ziad Abou Gergi, Head of Multi-Manager Funds, Hargreaves Lansdown:
“Inflation numbers for the month of November continue to surprise on the downside, with the Consumer Price Index up by 0.1% from previous month versus 0.3% expected – bringing the increase over the last 12 months to 7.1%, versus 7.3% expected, and 7.7% in October. The surprise in the CPI data is very positive news for investor sentiment over the short term as it shows that the Fed might not need to increase interest rates as high as previously expected, which would be supportive for growth.
The main risk on the economy next year is the severity of the slowdown following the rate hikes. So, if the Fed doesn’t need to continue with this tightening, the prospect of soft landing becomes better. The market reaction to the inflation number has been positive, with the S&P 500 futures up close to 3%, the Nasdaq 100 futures up close to 4% and the US dollar dropping to 1.241 versus the pound and to 1.06 versus the euro.”
