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US inflation meets expectations at 2.7% in November
The US inflation rate rose to 2.7% year-on-year in November, matching market expectations. Core CPI remained steady at 3.3%, aligning with forecasts. Both headline and core readings reflected anticipated increases
US Nov. Consumer Prices Rise 2.7% Y/Y; Est. +2.7%
US Nov. Core CPI Rises 3.3% Y/Y; Est. +3.3%
Both the monthly and the year-on-year increases are as forecast, for both the headline and core readings
US Inflation rises to 2.7% in November
The annual inflation rate in the US climbed to 2.7% in November, up from 2.6% in October, aligning with market expectations. On a monthly basis, the Consumer Price Index (CPI) rose 0.3%, the largest increase since April and slightly above October's 0.2%. This uptick was driven by higher prices across categories, including shelter, used vehicles, household goods, medical care, new vehicles, and recreational activities.
The in-line inflation reading has strengthened expectations for a rate cut by the Federal Reserve in December. Current swap markets are pricing in a nearly fully anticipated 25-basis-point reduction, with December swaps showing 22 basis points priced, up from 20 basis points earlier.
RBA official warns of tariff implications
Speaking at an event today, Reserve Bank of Australia Deputy Governor Andrew Hauser highlighted the potential economic repercussions of US President-elect Donald Trump’s proposed tariff measures. While acknowledging that higher global tariffs could dampen activity across supply chains, Hauser emphasized the uncertainty surrounding the full impact.
"Given this uncertainty, it is important that we don’t prejudge the implications of tariffs for policy but monitor developments closely and stand ready to respond appropriately as the facts emerge," Hauser stated.
Hauser pointed to Australia’s vulnerability due to its heavy trade exposure to China, which imports over 80% of Australia's iron ore exports and accounts for three-quarters of global iron ore imports. This dependence increases Australia's risk of disruptions should Beijing face punitive tariffs or if global trade patterns shift along geopolitical lines.
“This seems to suggest that Australia could find itself more seriously affected by a global trade war than some of the average exposure data suggest,” Hauser warned, signaling the need for vigilance as global trade dynamics evolve.
