Bold statement to hook readers: Inflation isn’t just numbers on a page—it could shape your wallet and the path of next year’s interest rates, and this month’s CPI release is at the center of that debate.
The November consumer price index (CPI) report, coming this Thursday, will be the first inflation read investors see since the U.S. government shutdown ended last month. Economists surveyed by Dow Jones expect the annual inflation rate to be 3.1% overall, with core CPI—excluding food and energy—projected at 3.0%.
The Bureau of Labor Statistics has noted that the November 2025 release will not include any month-over-month changes for November if October data are missing, after the agency canceled the October CPI release in late November. The most recent published CPI data, from September, showed a 3.0% year-over-year increase for both headline CPI and core CPI.
As José Torres, a senior economist at Interactive Brokers, put it, the difference between a 2.x% reading and a 3.x% reading is psychologically significant: investors watch whether inflation has truly cooled. He’s seen room for the headline and core to come in at 2.9% each, with a range potentially stretching to 3.1% for the headline depending on the month’s data quality and timing.
A 2.9% reading could boost stock momentum heading into 2026 and potentially clear a path for a Santa Claus rally. It might also influence the Fed’s rate outlook next year, including the possibility of at least one rate cut if inflation remains subdued. Torres emphasized that keeping inflation in the two-percent range would strengthen expectations for additional rate cuts in 2025’s final inflation report, rather than letting it drift toward the threes.
However, the report is unlikely to be a clean signal for market direction. Victoria Fernandez, chief market strategist at Crossmark Global Investments, cautions that a 0.1 percentage-point move in either direction is unlikely to trigger a dramatic market reaction. She also expects Fed policymakers to stay in a wait-and-see mode, even if the CPI comes in at 2.9%.
The November CPI release follows the resolution of the government shutdown—ending after 43 days, the longest in U.S. history—after President Donald Trump signed a funding bill on November 12. This reopening allowed data collection to resume, but Fernandez notes that data gathered later in the month may not perfectly reflect the month’s beginning conditions. As a result, some analysts worry about potential biases in late-month price measurements compared with early-month readings.
In Fernandez’s view, the overarching takeaway remains that inflation is still elevated and not on a clear, rapid path back to 2%. The broader inflation story is complex: unemployment signals, household income, and consumer spending all present mixed signals, while earnings and revenue forecasts for next year can still point in opposing directions. Until more complete data emerge, the true long-term trajectory remains uncertain, inviting ongoing discussion and debate about how to interpret the latest inflation readings.
