U.S. CPI REPORT: INFLATION MOVES DOWN IN NOVEMBER AS ENERGY PRICES DECLINE

Key points: Consumer prices remained stable in November as the rise in core and food prices was offset by a collapse in energy prices. As a result, inflation declined from 2.5% to 2.2% while core inflation gained one tenth, increasing to 2.2%, in line with expectations. Interestingly, the price of core goods remained in positive territory as the price of used cars continued to soar. The price of shelter (the biggest core component) also picked up after two months of modest gains. In short, there is still no visible upward momentum in inflation numbers while inflation expectations have declined recently. This should give the Fed some room to cast a cautious message at its monetary policy meeting next week.