'Absence of data' in CPI report flashes yellow for further interest rate cuts

Inflation Data Overview - The Consumer Price Index (CPI) rose by 2.7% in November, lower than Wall Street's expectation of 3.1% [2] - Core inflation, excluding food and energy prices, was reported at 2.6%, compared to estimates of 3% [2] - Over the two-month period since September, both headline and core CPI increased by only 0.2% [3] Impact of Government Shutdown - The recent inflation data may not significantly alter the Federal Reserve's outlook due to data collection disruptions caused by the government shutdown [1][4] - The shutdown halted much of the price data collection by the Bureau of Labor Statistics, leading to skepticism about the reliability of the current inflation figures [2][4] Economic Perspectives - Economists view the latest inflation reading as progress towards the Federal Reserve's 2% inflation target, despite still being above the target [5] - The Fed is in a "wait-and-see" mode, with the latest data potentially opening the door for additional rate cuts [6] Sector-Specific Insights - A decline in rents contributed to the overall decrease in inflation, while core goods prices rose by 1.4% due to tariffs [7] - Services inflation, excluding energy prices, increased by 3%, down from 3.5% since September, indicating a trend that the Fed is closely monitoring [7] - Fed Governor Stephen Miran supports the view that lower rents can lead to reduced inflation, which may mitigate the impact of tariffs [8]