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(Bloomberg) — Forecasters expect a monthly report on US consumer prices to show a fourth-straight month of firm increases in prices, suggesting progress toward lower inflation is stalling.

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The so-called core consumer price index that excludes food and energy is seen rising 0.3% in November from a month before, according to the median estimate in a Bloomberg survey. The report due Wednesday from the Bureau of Labor Statistics is also projected to show the overall measure rose by a similar amount.

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The CPI release and another report on producer prices due Thursday will be the last look at inflation data Federal Reserve officials will have ahead of their policy meeting next week. While traders still largely expect central bankers to cut interest rates for a third straight gathering, a series of strong inflation readings may prompt the Fed to slow the pace of reductions going forward. 

“If the inflation data come in largely in line, we expect the Fed to follow through with another cut next week,” Deutsche Bank AG economists led by Brett Ryan said Monday in a note. “However, we expect the messaging coming out of the meeting to heavily emphasize a more gradual pace of easing going forward.”

Fed Target

Though inflation has largely come down from the peaks seen in the aftermath of the pandemic, it has been moving sideways in recent months. With that in mind, policymakers are trying to strike the right balance between making sure inflation will return back to their 2% target and keeping the economy and the labor market running at a healthy pace.

While the central bank bases its inflation goal on a different metric — the personal consumption expenditures price index — it also pays close attention to the trajectory of the CPI, especially as it’s the first gold-standard report on prices released every month. The November PCE report is due after the Fed meeting.

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What Bloomberg Economics Says…

“We expect faster price gains in core goods (0.3% in November vs. flat prior), especially used cars. Given unfavorable seasonal factors for used cars this fall, it would take large monthly price drops to maintain disinflation momentum. We estimate used-car prices rose 1.2% in November (vs. 2.7% prior), a third straight advance following declines over most of the year. New-car prices likely rose 0.4% (vs. 0% prior).”

— Anna Wong and Chris G. Collins, economists

To read the full note, click here

Some of the categories that have generally contributed to the broader disinflation trend have provided less impetus toward lower inflation in recent months. Many economists expect core goods prices rose for a third month in November — after posting declines throughout most of the year — amid higher used-car and apparel costs. Housing and car insurance are also seen keeping inflation elevated.

“The final leg of inflation’s journey back to the Fed’s target is looking tougher and tougher,” Wells Fargo & Co economists Sarah House and Aubrey Woessner said in a note. They expect the road to the Fed’s 2% goal “to drag on through our 2026 forecast horizon, with negligible inroads made in the year ahead.”

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Trump Effect

The Wells Fargo team and others also argued new headwinds to inflation may emerge now that President-elect Donald Trump has sealed his return to the White House. While consumers’ views of the economy and their finances have improved since the Nov. 5 election, some of his campaign promises — including tax cuts and punitive tariffs — are seen potentially boosting inflation. Some businesses, for example, are considering raising prices in anticipation for higher tariffs.

“From a fundamental standpoint, we do not see material upside risk to inflation: The labor market has rebalanced, supply constraints have largely subsided, and inflation expectations remain anchored,” wrote Bank of America Corp. economists Stephen Juneau and Jeseo Park. “That said, progress on inflation should stall next year given our expected changes to tariffs, fiscal and immigration policies.”

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