The US's anticipated inflation figures strongly influence trends, especially one day before the Federal Reserve announces its latest monetary policy decision.
ADVERTISEMENTHigher-than-expected inflation in November has dampened hopes that the US Federal Reserve (Fed) will cut interest rates in the near future and give a boost to the US economy.
Consumer prices in the US edged 0.1% higher in November 2023 from the previous month, and excluding volatile items such as food and energy, core inflation increased by 0.3%, according to the latest statistics from the US Bureau of Labor.
Yet annual inflation sat at 3.1% in November 2023, the lowest in five months, down from 3.2% in October and in line with market forecasts.
Measured from a year ago, core prices rose 4%, the same as in October. The Fed considers core prices to be a better guide to the future path of inflation.
US inflation figures are some of the strongest to come out this week, as they provide economic direction for investors and drive speculation on whether or not the Fed is likely to cut interest rates - which currently sit at 5.25-5.50% - early next year.
Such a move could boost US GDP by reducing borrowing costs across the economy, making mortgages, auto loans, and business borrowing less expensive.
Annual inflation rates show a distinctive decline in the past 12 months as Fed officials keep their 2% inflation target in their crosshairs.
Fuelling hopes further that inflation is on course to come down, a New York Federal Reserve survey published on Monday revealed that US consumer expectations of inflation are at their lowest level in over two years.
Fed Chair Jerome Powell however has recently downplayed the idea that rate reductions are nearing as the central bank is expected to keep its key short-term rate unchanged when it meets this week.
