US Public's Downbeat View Of Economy Is Real, Chicago Fed Research Shows  

• Consumer prices in the U.S. rose unexpectedly in November, driven by increases in rents, healthcare, and motor vehicle insurance. The decline in gasoline prices was offset by other factors, contributing to a 0.1% increase in the Consumer Price Index (CPI).
• Prices for used cars and trucks rebounded, boosting underlying inflation. The report also highlighted a rise in healthcare costs and services inflation, indicating persistent inflationary pressures. Despite a decline in apparel prices, overall inflation remains above the Federal Reserve's 2% target.
• The unexpected inflation readings, coupled with positive job market data, suggest that the Federal Reserve is unlikely to consider early interest rate cuts in the near future. The Fed is expected to maintain its current policy tightening stance, with rates raised by 525 basis points since March 2022.
• While some economic indicators show a continuation of inflation, there are signs that inflation expectations among consumers are softening. Economists expect cooler inflation readings next year; however, uncertainties remain, impacting market expectations and potential challenges for President Joe Biden's approval ratings and reelection prospects in 2024.

(Source: Reuters)