Prices have risen more slowly in the US.
(Photo: AP)
Dusseldorf Inflation in the US fell slightly in November. The annual rate of inflation was 7.1 percent, the US Department of Labor announced in Washington on Tuesday. Market participants had previously expected a decline to 7.3 percent.
In October, the US inflation rate fell more than expected to 7.7 percent. This had fueled expectations that the US Federal Reserve could raise interest rates less than previously communicated – and possibly lower them again next year. This triggered a rally on the stock exchanges.
Against this background, the current figures were eagerly awaited. Because November inflation is the last value that the Fed can consider before making its interest rate decision this Wednesday evening.
After the central bank had offered interest rates by 0.75 percentage points four times, market participants are now assuming an increase of just 0.5 percentage points. This would increase the key rate to 4.25 to 4.50 percent.
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Higher interest rates are seen as a drag on the economy, as investment and consumption tend to fall. That has an inflation-dampening effect. Despite the economic risks, Fed boss Jerome Powell intends to continue raising interest rates, as the Fed will have to be patient in the fight against high inflation.
So far, he has not ruled out that the key interest rate may have to be driven to a higher level in 2023 than previously signaled. In their September projection, the monetary watchdogs had estimated an average interest rate of 4.6 percent for the end of 2023.
More to come.
More: Eight stocks hedge funds are betting on ahead of the Fed meeting