US Inflation Surges in November, Complicating Fed's Rate Decisions

US wholesale inflation rose 0.4% in November, driven by higher food prices, indicating persistent price pressures despite a general decline in inflation from peak levels. The producer price index's year-over-year increase was the highest since February 2023. Despite this, the Federal Reserve is expected to cut its benchmark interest rate next week, continuing its recent trend of rate reductions following previous hikes aimed at curbing inflation. The report suggests that while inflation remains above the Fed's 2% target, certain components influencing the PCE index were weak, supporting the likelihood of a rate cut.