It's still all clear for the Federal Reserve next week to cut rates again. That's the message from this not-exactly-encouraging inflation report. The consumer price index in November rose 0.3% month over month and 2.7% year on year, the Bureau of Labor Statistics said Wednesday. Core CPI, which strips out volatile food and energy prices, increased 0.3% from October and 3.3% from the year earlier period. All of those increases were in line with Dow Jones consensus estimates. To be sure, the numbers reflect a slight increase in inflation from October's levels. But stock futures traded slightly higher before the bell -- as the new data is unlikely to dissuade the Fed from its cutting campaign.
Take a look at what some economists, strategists and investors had to say following the report:
Josh Hirt, senior U.S. economist at Vanguard: "The CPI print confirms the market consensus of another 25bps rate cut from the Federal Reserve. We are still closely monitoring the strength of the labor market and potential stickiness of certain components of inflation (shelter, services) heading into 2025."
Whitney Watson, co-chief investment officer of fixed income and liquidity solutions at Goldman Sachs Asset Management: "In-line core inflation clears the way for a rate cut at next week's FOMC meeting. Following today's data the Fed will depart for the holiday break still confident in the disinflation process and we think it remains on course for further gradual easing in the new year."
Alicia Levine, head of investment strategy and equities at BNY Wealth: "We can still cut here given where inflation is, and given where real rates are. But it's unmistakable that the last four months with core up 0.3% month over month is a trend."
Peter Boockvar, chief investment officer at Bleakley Financial Group: "Bottom line, core CPI has been between 3.2% and 3.3% y/o/y for the past 6 months and up by 0.3% m/o/m for 4 straight months. While rental price gains should continue to slow thus capping service price inflation, core goods prices are possibly bottoming out as seen with the rise in used car prices and stability in apparel to name a few key items."
Skyler Weinand, chief investment officer at Regan Capital: "Wednesday's inflation data was in-line with expectations and gives the Federal Reserve the green light for a 25 basis point rate cut at the December meeting, as it helps to confirm that we are still making progress on inflation even though it remains sticky. Recent economic data on both inflation and jobs paves the way for the Fed to cut interest rates by three or four times in 2025, but probably not more than that."
Elsewhere this morning on Wall Street, Citi named Take-Two Interactive a top pick heading into 2025 , citing the company's slate of video game maker -- including the much anticipated "Grand Theft Auto VI." "We continue to find Take-Two compelling at prevailing levels based on: 1) robust sales of GTA VI and 2) a robust pipeline of other IP following GTA VI," analyst Jason Bazinet wrote in a Tuesday note to clients. "In addition, we are elevating TTWO to our top pick within our coverage universe, as we view the risk-reward compelling at prevailing levels."