The Federal Reserve’s preferred measure of prices fell last month, another sign that inflation is easing and that consumers should expect to see lower interest rates in 2024
WASHINGTON — The Federal Reserve’s preferred measure of prices fell last month, another sign that inflation is easing and that Americans should benefit from reduced interest rates and get relief from painful price shocks in 2024.
Friday's report from the Commerce Department showed that U.S. consumer prices slid 0.1% last month from October and rose 2.6% from November 2022. The month-over-month drop was the largest since April 2020 when the economy was reeling from the COVID-19 pandemic.
Excluding volatile food and energy prices, so-called core inflation last month rose 0.1% from October and 3.2% from a year earlier.
The numbers show somewhat more progress against inflation than economists had expected. Inflation is steadily moving down to the Fed's year-over-year target of 2% and appears to be clearing the way for Fed rate cuts in 2024. That, in turn, could translate into lower rates on everything from mortgages to credit cards.
Rates on loans for cars, homes and other larger purchases tend to track the direction of Fed monetary policy, so when benchmark interest rates are cut in the U.S., consumer costs typically fall and free up more money for households to spend elsewhere.
The rate on the benchmark 30-year fixed-rate mortgage is already dropping: This week it dipped to a six-month low 6.67%, down from 7.79% in October.
Americans have already seen some relief from high prices. Consider the ingredients of a BLT sandwich: Prices are down almost 1% over the past year for bacon, more than 10% for lettuce and 4% for tomatoes. Car rental prices have
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