Inflation Down

 Month to month inflation was well below expectations:

Suddenly, inflation is running a lot less hot. It could get cooler still in the months ahead.

The Labor Department on Tuesday reported that U.S. consumer prices rose a seasonally adjusted 0.1% last month from October—well short of the 0.3% economists had expected. That put overall prices 7.1% above their year-earlier level, marking the smallest gain since December of last year. Prices excluding food and energy items—the so-called core that economists and policy makers look to for a better understanding of inflation’s trend—rose a smaller-than-expected 0.2% from October and were up 6% versus a year earlier.

Tuesday’s report changes the context for the Federal Reserve’s interest-rate decision on Wednesday. The central bank seems certain to raise its target range on rates by a half percentage point, and to signal that it expects to continue raising rates next year, but it would be hard for policy makers to not acknowledge that inflation has started to come off the boil. At the very least, that suggests they can raise rates in even smaller increments next year, and perhaps hold off from raising rates at some of their policy-setting meetings, in order to see how things pan out.

No, they won't hold off.  As I have noted before their incentives lead them to be brutal.

They are likely to raise rates by 50 basis points (½%), and an non-zero chance that they will raise rates by another 75 basis points.

Notwithstanding the dual mandate of the Federal Reserve, their true mission is the waging of war against the wages and security of the American worker.