• Inflation increased as expected in November.
• The consumer price index increased 2.7% for the 12 months ending November.
• The Federal Reserve will likely decide to cut interest rates in the last FOMC meeting of the year next week.

In November, inflation sped up once again.

The consumer price index increased 2.7% from a year ago as expected, higher than October's 2.6% rate and the highest reading since July, when the rate was 2.9%.

Matt Colyar, an economist at Moody's Analytics, told Business Insider before the new data was published that an acceleration wouldn't be concerning because November's increase would likely be because of housing inflation. Shelter inflation has mainly been cooling from its peak of over 8% in March last year but is still high compared to the pre-pandemic rate.

"If inflation were to accelerate because prices for cyclical, demand-driven things like hotels, vehicles, airfare, etc. jumped, then policymakers at the Federal Reserve will start to look at the US economy with a bit more caution," Colyar said. "That shouldn't be overstated, however. It takes more than one monthly data point to be a trend and we haven't yet seen that kind of dynamic emerging."

While shelter was the biggest contributor to inflation overall, housing price growth has slowed. "The shelter index increased 4.7 percent over the last year, the smallest 12-month increase since February 2022," a Bureau of Labor Statistics news release on Wednesday said.

Members of the Federal Open Market Committee will meet once more this year next week on December 17 and 18 and will likely announce another interest-rate cut. CME FedWatch showed after the new inflation data was published traders expected a nearly 100% chance of an interest rate cut of 25 basis points next week, up from a nearly 90% chance before the report.

The CPI increased 0.3% over the month in November from October, the same as the forecast and an uptick from October's increase of 0.2%. The news release said that the rise in the shelter index over the month accounted for almost 40% of the overall increase.

Core CPI, which excludes volatile food and energy prices, increased 3.3% from a year ago as expected. That's the same year-over-year rate as in October.

The energy index fell 3.2% year over year in November after declining 4.9% in October. Gas tumbled by 8.1% in November.

The food-at-home index rose 1.6% year-over-year in November after rising 1.1% in October, and the food-away-from-home index increased 3.6% in November after rising 3.8% in October.

Cory Stahle, an economist at the Indeed Hiring Lab, told BI following the jobs report that "there are still many reasons to be optimistic about the labor market," like the layoff rate being less than the pre-pandemic low. However, Stahle added, "As a Federal Reserve policymaker, you don't want to wait until things start looking bad to react to that because then by then you might be too late."

• Russia's central bank has been hiking its key interest rate to combat inflation.
• Top central banker Elvira Nabiullina says the fight is almost over, with inflation expected to slow.
• Business leaders have slammed Russia's increasing interest rate, saying it restricted their growth.

A key Russian official said an economic turnaround is on the horizon.

Russia's top central banker, Elvira Nabiullina, told the government yesterday that the country is approaching a "turning point" for inflation and interest rates, Moscow-based RBC Group reported.

Nabiullina told the State Duma that inflation should slow, though she did not specify when that would happen. Inflation hit 9.8% in September.

"We believe that our policy will reduce inflation to 4.5 to 5% next year, and then stabilize it near 4%. As it slows down, we will consider a gradual reduction in the key rate. If there are no additional external shocks, the reduction will begin next year," she said.

She indicated that credit activity is slowing because of the higher rate but said some industries have continued borrowing.

Earlier this month, local officials and business leaders shared pessimistic economic outlooks for the coming year at an economic forum.

Soaring prices and a difficult outlook on the ground

Nabiullina's comments come as the war in Ukraine approaches its three-year anniversary and inflation in Russia hits sky-high levels.

Last month, to tame prices, Russia's central bank hiked its key interest rate to a record high of 21%. The bank said earlier this month that it could hike the key rate again at its next meeting in December.

The government continues to spend big on defense. In September, Russia hiked its 2025 national defense state spending by 25%, to over $145 billion, signaling its resolve to continue its war in Ukraine.

For ordinary Russians, the effects of inflation are being felt on the ground level. The cost of staples like butter and potatoes is up over 25% each this year.

The country is also seeing shortages in the workforce and a population crisis.

And while Nabiullina's comments this week indicate a positive change is near, other leaders in Russia have expressed a gloomier economic outlook.

Andrei Klepach, the chief economist at the state-run development entity VEB.RF, predicted that, in the best case, economic growth would fall from an estimated 2.5% to around 2% in 2025. He also downgraded Russia's fixed capital investment growth from 1.9% to 1%, blaming the central bank's key rate.

Alexander Shokhin, the president of the Russian Union of Industrialists and Entrepreneurs, said high interest rates were forcing companies to delay investments.