Trump and the Fed face a tough challenge as CPI data show rising inflation.

Progress in Reducing Inflation Stalls

According to the recently released U.S. Consumer Price Index (CPI) data for November,World's largest foreign exchange dealer rankings the inflation issue in the United States remains unresolved. While both the overall CPI and core CPI (excluding food and energy) growth rates matched analyst expectations both month-over-month and year-over-year, the growth still indicates persistent inflationary pressure. The core CPI has recorded a 0.3% monthly growth for four consecutive months, suggesting that U.S. inflation appears to have entered a stable phase.

However, with the slowing pace of price increases, progress in reducing inflation has stalled, particularly in the costs of goods and services. In November, the CPI increased by 2.7% year-over-year, which reflects that the path to reducing inflation in the U.S. remains challenging.

Rebound in Commodity Prices: A Reversal

Notably, many commodities have experienced continuous declines or stabilization in prices over time, but this trend seems to have reversed. For example, the rise in car prices is particularly significant, partly due to a surge in demand for cars and trucks following hurricane events. This indicates that even under economic pressure, certain commodity prices can still fluctuate significantly, complicating efforts to reduce inflation.

According to analysis, CPI data shows inflationary pressure is on the rise, particularly in areas like automobiles and housing. The monthly growth rate of consumer goods prices, excluding food and energy, is at its fastest in a year and a half, making the outlook for reducing inflation more complex.

Core Challenges for Trump and the Federal Reserve

For incoming President Trump, the new inflation scenario presents severe challenges. Although Trump's election did not directly cause inflation, his policies and economic measures may exacerbate inflationary pressure to some extent. Factors like strong corporate profits and substantial fiscal deficits, coupled with increased economic stimulus measures from China, are driving prices upward.

As for the Federal Reserve, the pace of interest rate cuts in the coming year might be challenged. The current trend of rising inflation means that while controlling inflation, the Fed may need to adjust monetary policy more cautiously to respond to a constantly changing economic environment.

Future Inflation Outlook

Although current inflation growth seems to be partly under control, the "last mile" of reducing inflation remains a long and arduous path.

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