The November Consumer Price Index report arrives at a sensitive moment for markets, with investors already scaling back expectations for further Federal Reserve easing.
Markets are currently pricing in just a 24% chance of a fourth consecutive Federal Reserve rate cut in January, according to Fed funds futures, after Chair Jerome Powell said last week the central bank is “well positioned” to wait and assess how the economy evolves.
That makes the inflation print especially important for near-term Fed policy — especially after a noisy labor market report released earlier this week.
November CPI: What Prediction Markets And Economists Are Pricing In
Because of the recent government shutdown, the Bureau of Labor Statistics will not publish October CPI aggregates, forcing investors to focus on two-month averages or year-over-year figures rather than the typical one-month change.
Economist consensus tracked by TradingEconomics calls for headline CPI to rise from 3.0% to 3.1% year over year, with core inflation holding at 3.0%.
On Polymarket, traders are clustering tightly around that range.
The single most-likely outcome priced on the platform is a 3.0% year-over-year CPI reading, carrying roughly a 44% implied probability, followed by 3.1% at about 39%.
A softer 2.9% print carries only mid-teens odds, while outcomes at or above 3.2% are assigned just low single-digit probabilities.
Goldman Sachs economist Jessica Rindels sees potential for a slightly softer underlying inflation trend.
“We estimate that the core CPI increased by 0.21% month-over-month on average across October and November, which would lower the year-over-year rate to 2.88% in November,” she wrote in a note this week, citing upward pressure from tariffs, vehicle prices and airfares, offset by drag from delayed data collection tied to holiday discounting.
Rindels added that “over the next few months, we expect tariffs to continue to boost monthly inflation,” but said underlying trend inflation should ease further next year as housing and labor market pressures fade.
Bank of America economist Stephen Juneau struck a similar but slightly more cautious tone.
“Headline and core CPI likely rose an average of 0.23% m/m over the two-months ending in November,” he wrote, indicating that “goods inflation should remain sticky owing to tariffs, but services should be softer driven in part by health insurance.”
Bank of America estimates both the headline and core CPI to land at 2.9% year-over-year in November.
How Could Markets React?
A lower-than-expected inflation print could represent a meaningful relief for markets, especially as investor sentiment has turned more risk-off following the Fed’s December 10 meeting.
The Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:QQQ), has fallen roughly 4% in the week since that meeting.
Thus a benign or cooler-than-expected November reading, could support a rebound in risk assets by reviving expectations for a rate cut as soon as next month.
Conversely, a hotter-than-expected CPI could further pressure the ongoing tech selloff.
With January rate-cut odds already low, any upside inflation surprise would likely push Treasury yields higher and weigh further on equities, particularly interest-rate-sensitive sectors.
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