CPI Moderation Signals Inflation Progress, Boosting Risk-On Market Sentiment

By Matt Brienen

Published: 2024-12-11T18:56:37+00:00

November's CPI rose 0.3% monthly and 2.7% year-over-year, slightly above expectations. Core CPI increased 0.3%, driven by a 2% rise in used car prices and a 3.2% surge in lodging away from home, which accounted for 20% of inflation. Rent and Owners’ Equivalent Rent rose modestly at 0.2%, signaling progress in inflation control. Bond markets responded positively, reflecting optimism. Softer inflation readings support a risk-on market environment, aligning with the Fed's 2% target progress and boosting equity sentiment.