US Inflation Cools to 2.7% in November, Raising Rate-Cut Bets

US inflation eased more than expected in November, with consumer prices rising 2.7% year over year, according to the latest government data. That marked the slowest annual pace since 2021 and came in below economists’ forecast of 2.8%, reinforcing signs that price pressures continue to moderate.

The report also showed core CPI, which excludes food and energy, climbing 3.3% from a year earlier. While still above the Federal Reserve’s long-term target, the reading matched or slightly improved expectations and suggested underlying inflation is gradually cooling as well.

The softer data strengthened market expectations that the Federal Reserve may have more room to cut interest rates in 2025 if disinflation continues. Investors responded positively, with stock futures moving higher after the release as traders priced in a more favorable policy outlook.

For households, the report offers some relief after a prolonged period of elevated prices, though the pace of progress remains uneven across categories. For policymakers, the latest figures support the view that inflation is moving in the right direction, even if the final stretch back to the Fed’s 2% target may take time.