The CPI is a key barometer of inflation, measuring how quickly price levels are changing across the American economy.

The inflation rate decreased from 3.20% in October to 3.10% in November of 2023. Inflation in the United States is expected to end the year around 4% higher than 12 months previously, while it is expected to end the 4th quarter around 3% higher than three months previously. In the long term, the US inflation rate is projected to trend around 2.5% in 2024 and 2.4% in 2025. Even as November’s core inflation ticked up to a pace more consistent with 3% annual inflation, long-term measures suggest the Fed has made significant progress on disinflation over the past six months. There are also signs that China’s deflation is giving another disinflationary boost to core goods. Short-term inflation expectations have come down sharply in recent months on lower prices of gasoline and energy. Our baseline is for the Federal Reserve to start cutting interest rates in March 2024.