The October CPI print showed that inflation in the US remains “sticky as expected”, according to Wells Fargo’s analysis of the data.
Last month’s CPI showed a 0.2% increase in consumer prices, marking the fourth consecutive monthly rise and pushing the year-over-year rate up to 2.6%.
Core CPI, which excludes volatile food and energy prices, rose by 0.3% for a third straight month.
While inflation has moderated from its highs last year, the pace of improvement has slowed.
Analysts at Wells Fargo pointed to the minimal monthly progress on core inflation, which remains elevated with a three-month annualized rate of 3.6%.
“We believe the FOMC (Federal Open Market Committee) is still on track to reduce the federal funds rate by another 25 bps at its December 17-18 meeting,” said analysts.
They continued: “The cumulative progress on inflation, cooling of the labor market and still-tight monetary policy likely will push the FOMC to cut rates one more time before the end of the year.
“That said, the inflation data over the past few months have not shown much additional progress, and the election outcome has raised new questions about the path ahead for price growth.”
Some analysts have voiced concerns that president-elect Donald Trump’s low-tax, high-tariff policies threaten the Federal Reserve’s ambition to bring annual inflation down to 2%.