US Inflation Cools Sharply in November, CPI Misses Forecasts

Core Insights - US inflation slowed more than expected in November, with the headline Consumer Price Index (CPI) rising 2.7% year over year, below market expectations of 3.1% [1] - Core CPI, excluding food and energy, increased 2.6% year over year, also missing forecasts of 3.0%, indicating a notable deceleration in price pressures [2] Market Implications - The softer-than-expected inflation data suggests that inflation is cooling faster than anticipated, which may lead to a shift in Federal Reserve policy towards a more accommodative stance sooner than previously expected [3] - Markets are likely to interpret the data as supportive of rate cuts, particularly for early 2026, as lower inflation reduces pressure on real yields and the US dollar, benefiting risk assets [4] Crypto Market Reaction - A downside inflation surprise typically acts as a macro tailwind for the crypto market, improving liquidity conditions and risk appetite [5] - Short-term price action in the crypto market will depend on how quickly markets adjust Fed policy expectations and whether follow-through buying occurs after the initial reaction [5]