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]

Core Viewpoint - The U.S. Federal Reserve must maintain a restrictive monetary policy to achieve its 2% inflation target, as stated by Cleveland Fed President Beth Hammack [1][2]. Group 1: Monetary Policy Stance - The Federal Reserve is facing challenges on both sides of its mandate, which includes managing inflation and maximizing employment [1]. - Hammack emphasizes the need for a restrictive policy stance to bring inflation back to the target level [2]. - Hammack, known for her hawkish views, anticipates that inflation will remain above the target for the next 1-2 years [2]. Group 2: Inflation Concerns - Hammack highlights the need to monitor pressures in the services sector, such as insurance, which contribute to "super core" inflation, indicating that inflationary pressures may not solely stem from tariff impacts [3]. - She previously indicated that the Fed should be cautious in removing restrictive monetary policies, given that inflation remains persistent and above the 2% target [3].