Crypto and Stock Futures Jump as U.S. Inflation Cools to 2.7% in November, Below Expectations

TLDR

• November CPI rose 2.7% annually, below the 3.1% forecast and down from September’s 3.0%
• Core CPI increased 2.6% year-over-year, also under the expected 3.1% rise
• October’s inflation report was canceled due to the 43-day government shutdown earlier this year
• Both readings remain above the Federal Reserve’s 2% inflation target
• Markets price in only 25% chance of a Fed rate cut in January 2026

Inflation in the United States slowed more than economists predicted in November. The Bureau of Labor Statistics released new data Thursday showing consumer prices rose at a slower pace than anticipated.

The Consumer Price Index climbed 2.7% compared to November 2024. Economists surveyed by Bloomberg had expected a 3.1% increase. The reading came in lower than September’s 3.0% rise, which was the most recent available data point.

Core inflation, which excludes food and energy prices, increased 2.6% year-over-year in November. This figure also fell short of the 3.1% forecast from economists. Core inflation is watched closely by policymakers because it removes volatile price swings from the equation.

The November report marks the first inflation data released since the government shutdown ended. October’s scheduled CPI report was canceled after the Bureau of Labor Statistics could not collect complete data during the 43-day shutdown earlier this year.

The incomplete data collection creates some uncertainty around the numbers. Goldman Sachs noted that collecting prices only in the second half of November could push readings lower. Holiday sales typically begin around mid-November, causing goods prices to drop sharply.

Data Collection Returns to Normal Schedule

Thursday’s release represents the last major economic report affected by the altered schedule from the government shutdown. The November jobs report came out Tuesday, showing job creation exceeded expectations while unemployment hit a four-year high.

Monthly jobs reports and inflation data will return to their regular release dates going forward. The December jobs report is scheduled for January 9, 2026, back to its typical Friday morning slot.

Both headline and core inflation remain above the Federal Reserve’s 2% target. The central bank aims for 2% inflation as measured by the core personal consumption expenditures index. September’s core PCE data, released earlier this month, showed prices up 2.8% annually.

Fed Rate Cut Odds Remain Low

Jeffrey Roach, chief economist for LPL Financial, said inflation stays above target but should be temporary. He expects pricing pressures to ease as demand cools in coming months.

Bank of America economists wrote before the data release that goods inflation should remain sticky due to tariffs. They predict services inflation will soften partly because of health insurance costs.

The mixed signals in inflation data will likely keep the Federal Reserve from cutting rates at its January meeting. Traders currently see only a 25% chance of a rate cut next month.

The Fed cut rates by 0.25% last week, bringing its key lending rate to a range of 3.5% to 3.75%. This marks the lowest level since 2022. The central bank reduced rates at three consecutive meetings to end 2025.

Fed members showed division on the recent rate cut decision. Three officials formally dissented from last week’s move. Several others expressed reservations through their policy projections.

The Fed’s latest forecasts suggest only one more rate cut in 2026. The November inflation data came in below September’s reading of 3.0% for both headline and core measures.

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