Figure matches Wall Street’s forecasts and clears way for Federal Reserve rate cut next week
by ColSmith and Harriet Clarfelt
FT
Wednesday’s data from the Bureau of Labor Statistics was in line with the expectations of economists polled by Bloomberg. But it was higher than the 2.6 per cent rate in October, which itself marked an increase on the previous month.
Market pricing indicated that investors now assign a more than 98 per cent probability to a quarter-point rate cut in December, up from less than 90 per cent before the release of the latest inflation figures.
Brian Levitt, global market strategist at Invesco, said the figures were “very much within the Fed’s comfort zone and support[ed] a rate cut at the next meeting”. A quarter-point cut next week would take interest rates to a new target range of 4.25-4.5 per cent.