CPI

The Consumer Price Index figures released on Tuesday are closely watched because they are the first major inflation data to come out each month. But the Fed ...

Along with supply chain improvements, they point to the continued drag on growth from the Fed’s interest rate increases and from a shrinking federal deficit. Administration officials have repeatedly cited progress in unclogging global supply chains to relieve backlogs that pushed up the price of goods like furniture and appliances in recent years. He hailed the report as “news that provides some optimism for the holiday season, and I would argue, the year ahead.” [Rents continued to rise rapidly in November, a sign that inflation remains stubborn in key categories.](#rents-continued-to-rise-rapidly-in-november-a-sign-that-inflation-remains-stubborn-in-key-categories) The index, which measures monthly changes in the international prices of a basket of food commodities, was virtually unchanged from the month prior, and stood just marginally above its value one year ago. The central bank is expected to raise rates by half a percentage point on Wednesday, which would represent a slowdown from increases of three-quarters of a point in previous meetings since June. The price of bread rose 2 percent from October, driven in part by higher flour prices, while eggs gained 2.3 percent and lettuce shot up 8.9 percent. Price indexes for fruits and vegetables, cereals and bakery products, and dairy products rose in November, while an index for meats, poultry, fish and eggs fell from the previous month. Brent crude, the international benchmark, rose over 3 percent to settle above $80 for the first time in a week. That sort of self-fulfilling cycle is exactly what the Fed is trying to avoid. That is poised to slow down notably in the coming months. For instance, food and fuel price jumps are moderating after climbing rapidly earlier this year, an effect of transportation issues and fallout from the war in Ukraine.

The consumer price index was expected to increase 0.3% in November, according to Dow Jones estimates.

As recently as February, the used cars and trucks index was up more than 40% on an annual basis, the result of higher demand as a microchip shortage caused a backlog in new car production. Real average hourly earnings rose 0.5% for the month, though they were still down 1.9% from a year ago. That gauge was little changed in November but is up nearly 7.3% from a year ago. The central bank has boosted its short-term borrowing rate six times in all, pushing the benchmark up to a targeted range of 3.75%-4%. Inflation spiked in spring 2021, the result of converging factors that took price increases to their highest levels since the stagflation days of the early 1980s. Markets widely expect the FOMC on Wednesday to announce a 0.5 percentage point rate increase, regardless of Tuesday's CPI reading. [roared higher following the report](https://www.cnbc.com/2022/12/12/stock-market-futures-open-to-close-news.html), with futures tied to the Dow Jones Industrial Average up more than 800 points initially before easing a bit. [Falling energy prices](https://www.cnbc.com/2022/12/08/gasoline-is-cheaper-now-than-a-year-ago-and-could-fall-below-3.html) helped keep inflation at bay. However, the rally lost much of its steam through the session, and the Dow was up just 50 points or so near 2:30 p.m. Food prices, however, rose 0.5% and were up 10.6% from a year ago. The energy index declined 1.6% for the month, due in part to a 2% decrease in gasoline. - The consumer price index rose just 0.1% from the previous month, and increased 7.1% from a year ago, compared with respective estimates of 0.3% and 7.3%.

The Consumer Price Index (CPI) in November showed a 7.1% increase over last year and 0.1% increase over the month, the Bureau of Labor Statistics said Tuesday. Economists had expected prices to rise at an annual 7.3% clip and 0.3% month-over-month, ...

This morning's November CPI report adds another notable inflation improvement. The All Items monthly rates fell from October's low, 0.4% rates to: A nominal ...

That was its first roller-coaster undulation that would repeat through the 1970s and finally peak (and trough) in the 1980s. And, as in virtually all past cycles, that growth and those gains will be in different areas than in the past. Swinging the pendulum to easy money, the Fed's new policy immediately gripped Wall Street, and the 1967-68 "go-go" stock market and investment banking activities began in earnest. It was an effective effort, cutting the GNP growth rate (the primary economy measure at the time) significantly and knocking the stock market down sharply. Moreover, as is common when the goal is to make money, contrary information (like last week's "too high" Producer Price Index inflation number) is just forgotten. But in the fall, Wall Street worries about too-much, too-fast emerged, so the Fed reversed before the GNP hit negative real growth (recession) territory and before the inflation rate returned to its 1% to 2% level. What makes the situation complicated is that choice #2 (short-term, Wall Street trend) appears to be replacing #1 (long-term, Federal Reserve trend), but it's not. With Wall Street at the controls and the baggage car forgotten on a siding, it looks ready to assume the lead. "Not yet - be patient," is the reply. Nobody even cracked the binding of the report and reflected on what all those other numbers mean. The November Consumer Price Index inflation report just proclaimed to Wall Street, "You're the winner!" The All Items monthly rates fell from October’s low, 0.4% rates to: A nominal (actual) decline of -0.1% (-1.2% annualized), and a seasonally-adjusted rise of only 0.1% (1.2% annualized).

Inflation is still way too high, but the data offers some hope that it can ease alongside a still-healthy economy.

[It’s a big week for markets with CPI and Fed on tap](https://www.axios.com/2022/12/12/big-week-markets-cpi-fed) [Yellen says inflation will be "much lower" by end of 2023](https://www.axios.com/2022/12/12/yellen-inflation-lower-2023-end) [inflation under control](https://www.axios.com/2022/11/02/fed-raises-interest-rates-inflation), raising interest rates at a historic clip — moves that risk throwing the economy into a recession. - Officials will likely raise rates by a smaller (but still historically huge) amount following a two-day policy meeting that concludes on Wednesday. On a monthly basis, it rose 0.2% — up 6% over the 12 months ending in November. [inflation reading in October](https://www.axios.com/2022/11/10/cpi-inflation-october), consumer price gains slowed even further last month: the Consumer Price Index rose 7.1% in the year ending in November, down from 7.7% the prior month, the Labor Department said on Tuesday. By the numbers: On a monthly basis, CPI rose 0.1%, slower than the 0.4% in October.

Consumer prices rose 7.1% in November from a year ago, the government said Tuesday.

And with average wages growing at a brisk 5%-6% a year, price pressures keep building in that sector of the economy. On Wednesday, the Fed is expected to raise its key short-term rate by a half-point, after four straight three-quarter-point increases. [has said he is tracking price trends](https://apnews.com/article/inflation-business-prices-jerome-powell-government-and-politics-9e7fed8f82ffbe9af205ec969e6277af) in three different categories to best understand the likely path of inflation: Goods, excluding volatile food and energy costs; housing, which includes rents and the cost of homeownership; and services excluding housing, such as auto insurance, [pet services](https://apnews.com/article/inflation-health-economy-prices-pets-5e6ab45eb6e3e316a89158bb630a9835) and education. On Wednesday, the Fed is set to boost its benchmark rate for a seventh time this year, a move that will further raise borrowing costs for consumers and businesses. Housing costs, which make up nearly a third of the consumer price index, are still rising. That was down from 7.7% in October and a recent peak of 9.1% in June.

Consumer prices are up 7.1% year-over-year as of November 2022, according to Tuesday's Consumer Price Index report from the Bureau of Labor Statistics.

However, the upcoming rate increase is largely expected to be lower than the four prior 0.75 percentage point increases. November 2021 to November 2022: +14.2. November 2021 to November 2022: +4.4%. November 2021 to November 2022: +13.1%. November 2021 to November 2022: +7.1%. November 2021 to November 2022: +10.6%. But there’s good news, too: Energy prices are going down (-1.6%) compared with the previous month when energy costs rose (+1.8%). Both groceries and restaurant food increased by 0.5% month-over-month. Food prices are up, too. Tuesday’s report showed the smallest year-over-year increase in the index for any previous month since December 2021. The But prices are still higher than they were a year ago.

In this article, we take a look at the relationship between the Consumer Price Index (CPI), Federal Funds Rate, and S&P 500. We explain what the CPI and ...

The Federal Funds Rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. One of the goals of the Federal Reserve is to maintain price stabilty. As shown in the chart, changes in the CPI can have an impact on the Federal Funds Rate, as the Federal Reserve may choose to raise or lower the rate in response to changes in inflation. On the other hand, if the CPI is falling, it may indicate that the economy is slowing down, and the Federal Reserve may lower the federal funds rate to stimulate economic growth. This led the On the other hand, high interest rates can make borrowing more expensive and can act as a drag on economic growth, leading to lower stock prices. That means the Fed wants to see inflation from the same month last year, rise by only around 2 percent. This relationship may be due to the fact that low interest rates make borrowing cheaper for businesses and individuals, which can lead to increased investment and economic growth, and in turn, higher stock prices. If the CPI is rising, it may signal that inflation is increasing, and the Federal Reserve may choose to raise the federal funds rate in order to slow down the economy and keep inflation in check. The resulting index number can then be used to track changes in the cost of living over time. The CPI is commonly used as an economic indicator to measure inflation, as it shows the change in the cost of living over time. The CPI is one of the economic indicators that the Federal Reserve takes into account when deciding on the appropriate level for the federal funds rate.

Wall Street's main indexes opened sharply higher on Tuesday after a smaller-than-expected rise in U.S. consumer prices raised hopes that the Federal Reserve ...

(Bloomberg) -- US stocks soared and yields on Treasuries tumbled across the curve after data showed prices rose less than forecast last month, ...

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Market Data ...

The note then gave the following scenarios: 5% probability — CPI 7.8% or higher — S & P 500 down 4% to 5% 25% probability — CPI 7.5% - 7.7% — S & P 500 down 2.5% to 3.5% 50% probability — CPI 7.2% - 7.4%. — S & P 500 up 2% to 3% 15% probability — CPI 7.0% - 7.2% — "A bullish outcome that could pull terminal rate lower." — S & P 500 up 8% to 10% It's that last scenario that turned heads, even with just a 5% probability assigned. — S & P 500 up 4% to 5% 5% probability — CPI 6.9% or lower — "A print here could be the technical end of the bear market...This would give increasing confidence in projections of headline inflation falling [to] 3% in 2023. JPMorgan reiterated these scenarios again in its note Tuesday and noted that the derivatives markets are pricing in "a larger impact from CPI" than from the Federal Reserve rate decision Wednesday. The trading desk note from JPMorgan — which was sent early in the morning but didn't seem to gain traction with traders until later in the day — noted that the S & P 500 rallied 5.5% in a single day last month when the previous CPI report came in lighter than expected.

The Bureau of Labor Statistics released its November Consumer Price Index (CPI) at 8:30 a.m. ET on Tuesday. Here are the main figures from the report, ...

The Bureau of Labor Statistics released its November Consumer Price Index (CPI) at 8:30 a.m. ET on Tuesday. Here are the main figures from the report, ...

November's softer-than-expected consumer-price index is being described by traders and financial-market analysts as a “game-changer” that demonstrates ...

[TMUBMUSD02Y, 4.205%](/investing/bond/TMUBMUSD02Y?countryCode=BX&mod=MW_story_quote)was heading for its biggest drop in a month while the benchmark 10-year yield [TMUBMUSD10Y,](/investing/bond/TMUBMUSD10Y?countryCode=BX&mod=MW_story_quote)fell to 3.5%. [move in February](https://www.marketwatch.com/story/fed-seen-slowing-down-to-quarter-point-hike-in-february-after-soft-consumer-price-inflation-reading-11670946358?mod=search_headline&mod=article_inline). Stocks and bonds rallied, along [with gold ](https://www.marketwatch.com/story/gold-trades-modestly-higher-as-investors-await-inflation-report-11670937596?mod=search_headline&mod=article_inline)and [oil prices](https://www.marketwatch.com/story/oil-extends-bounce-as-supply-worries-rise-11670933223?mod=search_headline&mod=article_inline), while the Cboe Volatility Index [VIX, -7.52%](/investing/index/VIX?mod=MW_story_quote)of equity-market volatility fell and the ICE U.S. The S&P 500 3.499% [SPX,](/investing/index/SPX?mod=MW_story_quote)was up 0.8%, while the Nasdaq Composite gained 1.1%. “We were all expecting a softer report, but this is pretty significant and makes people question what the Fed is going to do moving forward,” said John Farawell, head of municipal trading at bond underwriter Roosevelt & Cross in New York. Dollar Index [DXY,](/investing/index/DXY?mod=MW_story_quote)traded -1.14% [at a nearly six-month low](https://www.marketwatch.com/livecoverage/stock-market-today-futures-tick-higher-ahead-of-inflation-data/card/dollar-drops-sharply-after-soft-cpi-reading-b6p41lUz0WAxnuA6gVBo?mod=article_inline). Policy makers “tamed inflation quicker than most people thought and we have to see what [Fed Chairman Jerome Powell] says tomorrow,” Farawell said via phone. Stocks [trimmed initial gains](https://www.marketwatch.com/story/u-s-stock-futures-inch-higher-ahead-of-crucial-inflation-report-11670924518?mod=market-snapshot&mod=article_inline), however, and the Dow Jones Industrial Average [DJIA,](/investing/index/DJIA?mod=MW_story_quote)briefly traded with a loss on investors’ concern that rates could still be left higher for longer. [CPI data](https://www.marketwatch.com/story/coming-up-cpi-inflation-report-11670937380?mod=home-page&mod=article_inline) showed the cost of living rose a scant 0.1% on a monthly basis in November. Those figures came on top of signs of easing price pressures in [October’s CPI report.](https://www.marketwatch.com/story/coming-up-consumer-price-index-for-october-11668086355?mod=article_inline) Before Tuesday’s CPI release for November, [Jeffrey Gundlach](https://www.marketwatch.com/story/doublelines-gundlach-sees-chance-u-s-inflation-could-dip-below-forecasts-in-2023-11670870350?mod=search_headline&mod=article_inline), chief executive officer and chief investment officer of DoubleLine Capital, said he expected inflation to dip below forecasts in 2023. has moved past its worst inflation spell in four decades seemed entirely plausible.

Congressman Don Beyer (D-VA), Chairman of the U.S. Congress Joint Economic Committee (JEC), released the following statement after the Bureau of Labor ...

The unemployment rate has fallen to nearly the lowest in 50 years, and third quarter GDP was up 2.9%—above expectations. “After slowing in October, inflation cooled again in November—another welcome sign for workers and families across the country. Core inflation, which excludes volatile food and energy prices, slowed to 0.2%, down slightly from 0.3% in October.

Tuesday, December 13, 2022. Pre-market futures are zooming forward this morning ahead of the opening bell, on agreeably softer Consumer Price Index (CPI) ...

Because the Fed hasn’t “leaked” any information to the Wall Street Journal that they’re having a change of heart (like they did a couple months back), we feel certain you can book 50 bps tomorrow — which would bring the Fed funds rate to a range of 4.25%-4.50%, the first time we’ve been north of 4% since the late Oughts, in the last years of the George W. The year-over-year figures is where we tend to chart overall inflation these days, and here we see +7.1% on headline, down 20 bps from consensus but down more than half a percentage point from October’s +7.7%. While pre-market traders have certainly gotten excited here — and we’re already seeing levels rolling off from those initial spikes in the indices — we’re still looking at high inflation metrics from an historical perspective here. On the Services side, however, we’re seeing more stickiness — especially in wages. Prior to the report’s release, we were looking at +260 points on the Dow, +35 on the S&P 500 and +120 points on the Nasdaq. CPI headline came in at +0.1% month over month, 20 basis points (bps) below expectations and 30 bps lower from the October print.

Congressman Don Beyer (D-VA), Chairman of the U.S. Congress Joint Economic Committee (JEC), released the following statement after the Bureau of Labor Statistics reported that monthly Consumer Price Index (CPI) inflation slowed to 0.1% on a seasonally ...

From the American Rescue Plan to the Infrastructure Investment and Jobs Act, and from the CHIPS and Science Act to the Inflation Reduction Act, today’s economic strength and resilience are a testament to those investments.” The unemployment rate has fallen to nearly the lowest in 50 years, and third quarter GDP was up 2.9%—above expectations. “After slowing in October, inflation cooled again in November—another welcome sign for workers and families across the country. “This deceleration exceeded expectations and is creating even more breathing room as we head into the holiday season. Core inflation, which excludes volatile food and energy prices, slowed to 0.2%, down slightly from 0.3% in October.?? Congressman Don Beyer (D-VA), Chairman of the U.S.

US government officials said they were not aware of any early leaks of closely watched inflation data Tuesday, following a surge of Treasuries buying that ...

The battle against inflation is far from over, but markets can't be blamed for rushing to judgment after an unequivocally positive consumer price index ...

That could be, but the Fed is going to hold on to that line of thinking until the hard inflation data prove it unequivocally wrong. But a quick resolution to the inflation problem at least increases the odds of avoiding that outcome and opens the door to an upside surprise. Clearly, the wage debate has its detractors who note that the current bout of inflation didn’t start with the labor market and think that the relationship between tight labor markets and inflation is antiquated. There should be some meaningful debate among committee members about making the next rate increase the Fed’s last, and markets will be waiting with bated breath for signs of how receptive Chair Jerome Powell is to that argument. The Fed’s rate-setting committee is still likely to raise interest rates by 50 basis points on Wednesday, but there can be little doubt that the numbers will embolden doves who think that the balance of risks is tipping toward recession over inflation. In the past, such moves would have been viewed as “getting ahead of ourselves,” but this one is different.

The latest report won't put to rest the Fed's broader inflation concerns, but there's no question that the outlook is improving drastically.

The numbers showed that core prices — excluding volatile food and energy — rose just 0.2% in November from the previous month. Stripping out the contentious shelter component of the index, core prices actually fell 0.1% on the month. Using a three-month annualized rate to smooth out the month-to-month volatility, the core index excluding shelter suggests an underlying rate of core inflation of just 1% — below the Federal Reserve’s target.

The consumer price index reading supports forecasts for the Federal Reserve to reduce the pace of monetary tightening when it meets later on Wednesday. Here's ...

Investors looking for the right tech exposure for 2023 may want to revisit the ARK Innovation ETF (ARKK) following the soft CPI report.

While there are a lot of options out there, an actively-managed strategy like ARKK may be the right ETF when looking at the whole of 2023 and all the innovations that markets might see in the months ahead. ARKK could be a strategy poised for more flows if that becomes the case, offering a particular tech exposure for 2023. ARKK targets firms that would benefit from “disruptive innovations” like improvements to AI, DNA technologies, and automation, to name a few. Mutual funds and hedge funds have pushed flows into stocks that could benefit from an overall rebound, in the latest sign that things may be turning around. The annual rate of inflation dipped from 7.7% to 7.1% in November, the lowest amount since the end of last year and a notable boost for the stock market. [cooler than expected Tuesday,](https://www.marketwatch.com/story/coming-up-cpi-inflation-report-11670937380?mod=home-page&mod=article_inline) with inflation rising just 0.1% last month.

The consumer price index increased 0.1% last month after advancing 0.4% in October. Economists polled by Reuters had forecast the CPI would increase 0.3%.

That could show up in the CPI data next year. The core CPI was restrained by prices for used cars and trucks, which dropped 2.9% and were down for a fifth straight month. The Fed has boosted its policy rate by 375 basis points this year from near zero to a 3.75%-4.00% range. That was the smallest gain in the so-called core CPI since August 2021 and followed a 0.3% rise in October. Owners' equivalent rent, a measure of the amount homeowners would pay to rent or would earn from renting their property, jumped 0.7% after increasing 0.6% in October. Healthcare costs declined 0.5%, reflecting decreases in prices for hospital and related services as well as prescription medication. The tamer inflation readings added to recent reports showing improvements in consumers' inflation expectations in December. The annual CPI peaked at 9.1% in June, which was the biggest increase since November 1981. Food prices climbed 0.5%, the smallest since December 2021, after rising 0.6% in October. That was the smallest advance since December 2021, and followed a 7.7% rise in October. "The broad improvements raise hopes price pressures are easing and the Fed will not have to tighten as much next spring," said Will Compernolle, a senior economist at FHN Financial in New York. Economists still expected the Fed to maintain its monetary policy tightening campaign at least through the first quarter of 2023.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into ...

The BLS weights College Tuition and Fees at 1.569% of the total expenditures. The other, Food, is a major part of the Food and Beverage category. Here we've separately plotted the College Tuition and Fees subcategory of the Education and Communication expenditure category. The tuition series in the chart above, however, is overly dramatic. For a more accurate view on college tuition, see the statistics at the [College Board](https://trends.collegeboard.org/college-pricing) website. The next chart overlays the highly volatile Energy aggregate on top of the eight expenditure categories. Another unique feature of Apparel is the obvious seasonal volatility of the contour. Transportation is the other category with high volatility — much more dramatic and irregular than the seasonality of Apparel. The BLS does not lump energy costs into an expenditure category. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which we'll refer to hereafter as the CPI. The slices are listed in the order used by the BLS in their tables, not the relative size. In effect, the Fed has been trying to increase inflation, operating at the macro level.

The battle against inflation is far from over, but markets can't be blamed for rushing to judgment after an unequivocally positive consumer price index ...

That could be, but the Fed is going to hold on to that line of thinking until the hard inflation data prove it unequivocally wrong. But a quick resolution to the inflation problem at least increases the odds of avoiding that outcome and opens the door to an upside surprise. Clearly, the wage debate has its detractors who note that the current bout of inflation didn’t start with the labor market and think that the relationship between tight labor markets and inflation is antiquated. There should be some meaningful debate among committee members about making the next rate increase the Fed’s last, and markets will be waiting with bated breath for signs of how receptive Chair Jerome Powell is to that argument. The Fed’s rate-setting committee is still likely to raise interest rates by 50 basis points on Wednesday, but there can be little doubt that the numbers will embolden doves who think that the balance of risks is tipping toward recession over inflation. The numbers showed that core prices—excluding volatile food and energy—rose just 0.2% in November from the previous month.

related investing news · On the eve of the Fed's decision, the case for stocks' year-end · The worst of inflation is likely over, but the worst for the economy ...

Tomorrow, in fact, is likely to mark the end of the Fed's string of 75-basis-point rate hikes. And until that happens, those hoping for a "soft landing" or no recession next year are likely to be disappointed. The two-year yield fell even more, as markets now see a much higher chance the Fed will back off more aggressive rate hikes in the near term. "Bond market and monetary indicators now suggest the Fed is already beyond neutral," Darda wrote two weeks ago. The Prices Paid index of the monthly ISM manufacturing index hit a new cycle low of 43 last month, "a level consistent with sub-2% PCE inflation," as MKM's Michael Darda points out. Before you shake your head and say c'mon, the CPI is still up more than 7% from a year ago and stocks are up 500 points?

But pockets of resistance linger in the consumer price index, and wage inflation could keep the Fed busy.

[retailer JOANN](https://www.morningstar.com/news/marketwatch/20221213107/joann-halts-dividend-targets-cost-cuts-to-shore-up-balance-sheet), on the retailer’s third-quarter earnings call. “This suggests that Fed messaging is probably past peak hawkishness as we see a downshift in the pace of hikes and approach [the] terminal [Fed funds rate].” Services inflation, which has steadily increased all year, was 0.3% in November, for an unchanged 12-month increase of 7.2%. “This aligns with what we hear from management teams in that the inflationary pressures are loosening.” labor market is still tight. [professional forecasters in the Philadelphia Fed](https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q4-2022) survey projected a median headline CPI of 4.5% next quarter. [projected to be 4.6% for 2023](https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/us-pay-increase-forecast-for-2023.aspx#:~:text=Employers%20in%20the%20U.S.%20plan,according%20to%20a%20new%20study), according to Willis Towers Watson, a percentage point above the level Fed Chair Jerome Powell sees as “ [being compatible with 2% inflation](https://apnews.com/article/inflation-business-pandemics-jerome-powell-federal-reserve-system-01ca0f8ac5439f764827fb89d18a51e7),” according to the Associated Press. “Commodity costs are mostly coming down, whether it’s corn flour, sugar and butter, or even some things like steel,” he said, but “food and sundries are still up more than nonfoods.” However, inflation in groceries and restaurant bills and some services have proven more resistant. “Fortunately, we are seeing stabilization across our cost structure and deflationary opportunities are now arising based on healing supply chain, stabilized commodity prices, and the strength of the dollar.” [Costco CFO Richard Galanti](https://investor.costco.com/governance/board-of-directors/default.aspx#Richard-A.--Galanti), on the company’s December 8 earnings call, said it sees a little light at the end of the tunnel, “but it’s still little,” according to the S&P Capital IQ transcript. [Twelve-month CPI fell to 7.1%](https://www.bls.gov/news.release/cpi.nr0.htm), the smallest increase since December 2021, according to Bureau of Labor Statistics (BLS) data. [Matt Peron, director of research at Janus Henderon Investors](https://www.janushenderson.com/en-us/advisor/bio/matt-peron/), in an email.

The November CPI confirms that the post-pandemic inflation episode has actually come to an end – though it seems that the Fed and most of the media haven't ...

The “latest news” is diluted with a lot of “prior information” that is now well out-of-date. At this point, the Fed seems to be tilting at some windmill of imaginary public opinion. It is hard to tell whether the policy-makers at the Federal Reserve are also fooled. And yet – the Fed continues to tighten. It is now running just slightly above the Fed’s target inflation level. Some of its flaws have been addressed and partially mitigated by the use of alternative inflation indexes, developed by the Federal Reserve over the years to try to portray a more accurate picture of the economic impact of price trends (covered in a previous column). Averages obscure the fine structure of the phenomenon subjected to averaging, in two ways. That is close to the average of 2.2% for the 4 years prior to the pandemic shock, and only slightly above the Fed’s inflation target of 2%. The pattern is clear. But if an annualized rate is needed, the Federal Reserve offers a better one, multiplying the percentage increase or decrease each month by 12. Yes, the Consumer Price Index (CPI) is still running hot and scary. This perception is driving aggressive Fed monetary policy actions, and undoubtedly contributing to the inflationary psychology among the general public.