CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s November Consumer Price Index Report:
“Inflation slowed down in November as the price of gasoline, used cars, medical care, and air travel declined. Increases in food and housing prices slightly offset these decreases resulting in monthly price bump of one-tenth of a percentage point. The headline inflation declined in November to 7.1% from 7.7% in October over a 12-month period.
“Most of the monthly increase in the consumer price index (CPI) comes from housing which is a lagged indicator. It takes over a year for the CPI to reflect current market trends. Tight monetary policy which recently pushed mortgage rates very high led to home price declines in several places. However, it takes time for this current market trend to show up in the CPI.
“The Federal Reserve is expected to increase the fed funds rate by 50 basis points tomorrow moving away from the aggressive consecutive increases in the last four meetings. This CPI report shows that price trends are going in the right direction although inflation is still very high above target.”