Analysts at Wells Fargo note that higher energy and services prices pushed the Consumer Price Index up 0.3% in November.

• “The Consumer Price Index (CPI) rose 0.3% in November and is up 2.1% over the past year. That marks the strongest 12-month pace in a year, but hardly signals inflation is getting out of hand. Much of the pickup in the CPI over the past year has stemmed from a diminishing drag from energy prices after oil prices swooned last fall.
• We continue to see few signs of recent tariffs having a meaningful effect on inflation, with core goods inflation flat in November and weakening on a year-ago basis.
• Core CPI is up 2.3%. That is toward the top end of this cycle’s range, but is unlikely to move the FOMC away from its easing bias. FOMC Chair Powell has suggested higher inflation is the main criteria for the committee to reverse course again and raise rates. But the trend in core CPI has not strengthened meaningfully in recent months; on a three-month average annualized basis, the core has been rising at a 2.1% pace.
• The FOMC has been emphasizing symmetry around its inflation target since 2017. Even as the core PCE deflator looks poised to return to 2.0% within the first half of next year, we suspect it will need to push well above that for a time considering it has averaged just 1.6% this expansion. With slowing growth expected to keep a lid on inflation and longterm inflation expectations near historic lows, the Fed’s next move on interest rates is much more likely to be down than up.”