Fed to Make Rate Call as Inflation Progress StallsFedtoMakeRateCallasInflationProgressStalls

US consumer inflation ticked higher in November, sending a cautionary signal just one week before the Federal Reserve makes its final rate decision of the year. The consumer price index was up 2.7% year-over-year last month, compared with 2.6% in October, according to a report on Wednesday. Excluding the more volatile food and energy sectors, inflation held steady at a 3.3% pace. The figures suggest that progress on wrangling inflation might have stalled, with categories such as housing and transportation offsetting relief in other areas such as energy. Meanwhile, the Labor Department said on Friday the US economy added 227,000 jobs in November, rebounding from weak October hiring that reflected the impact of two major hurricanes and a strike by Boeing workers.

Despite indications that price pressures and the labor market have been resilient against higher interest rates, another rate cut of 25 basis points will likely be on the Fed’s docket next Wednesday. Officials will also release an updated set of economic forecasts, including how much they expect to lower interest rates moving forward. Potential changes in tax, regulatory, and trade policies could add new wrinkles to the economic outlook as President-elect Donald Trump prepares to take office in January. Experts from PGIM Fixed Income discuss how Trump’s fiscal agenda, including the potential expansion of tariffs, could impact different industries.