Core CPI rose 2.6% year over year in November, undershooting the 3.0% forecast and adding to the sense that price pressures are moderating, even as data quality remains a concern.

Analysts expect the December CPI, due in mid-January, to be a more reliable gauge given the noisy November print and its timing ahead of the next Federal Reserve meeting.

Uncertainty persists over whether tariff changes and lingering price levels will translate into meaningful relief for consumers in the near term.

Fed officials face a debate between keeping the federal funds rate higher for longer to fight inflation and cutting rates to bolster hiring and growth as the jobs market slows.

Higher tariffs and import taxes complicate inflation dynamics, though economists note tariffs have not been as inflationary as feared and may still influence price pressures.

Tariffs and trade tensions are shaping price pressures and Fed policy debates, as the central bank weighs potential rate cuts or pauses amid mixed signals.

The November U.S. inflation data showed a 2.7% year-over-year rise in consumer prices, suggesting cooler inflation, but analysts warn the figure may be distorted by the 43-day federal government shutdown that delayed data collection and pushed October numbers into question.

The inflation print could influence expectations for Fed policy, with markets reacting positively to news that could pave the way for further rate cuts.

Fed Chair Powell acknowledged the dual-mandate tension and that there is no risk-free policy path, with markets pricing roughly a 75% chance of holding rates and 25% for a 25-basis-point cut at the next meeting.

The broader economy remains mixed, with softer unemployment and consumer spending alongside strong earnings growth expectations, complicating the inflation outlook toward the 2% target.

This is an ongoing, developing story and will be updated as new data arrive.

Stock futures rose after the release, with major indices advancing and Treasury yields pulling back, signaling cautious optimism about the data.