The Federal Reserve becomes cautious about cutting interest rates as US inflation rate rises to 2.7% in November

On December 11, the US inflation rate for November rose to 2.7%, a figure that aligns with economists' expectations and is higher than the 2.6% level in October. The data highlights concerns about sticky inflation following an increase in October's inflation. It is widely expected that the Federal Reserve will cut interest rates by 25 basis points for the third consecutive time next week, but the pace of cuts next year is uncertain as it strives to maintain its dual mission of keeping inflation close to 2% and maintaining a healthy labor market. As interest rates reach a more "neutral" level - high enough to curb inflation but low enough to protect the labor market - officials have discussed slowing down rate cuts. They argue that if action is taken too quickly, inflation could remain above their target of 2%, but acting too slowly could lead to a sharp rise in unemployment rates.