The Consumer Price Index (CPI) — the measurement of inflation in consumer goods and services prices — came out in line with November estimates, rising 0.3% month-over-month and 2.7% year-over-year. Core CPI, which excludes food and energy prices, also matched economist forecasts as it rose 0.3% from the prior month and 3.3% annually.

State Street senior global macro strategist Marvin Loh and EY chief economist Greg Daco sit down with the Morning Brief's Seana Smith and Brad Smith following this inflation report, especially as the Federal Reserve prepares to meet next week for its final FOMC policy meeting of 2024 where the central bank is expected to cut interest rates by 25 basis points.

"The good news is that we have an environment in which we're not seeing any acceleration in inflation," Daco cites, later adding: "The bad news is that there is indeed some stickiness in the underlying inflation dynamics. You're seeing core goods prices rising. This is something that we have to be a little bit careful of, especially as we look out on the horizon with the potential for tariffs that could be inflationary."

On the Fed front, Loh speculates that if officials show signs of wavering on their rate cut approach, "you start wondering if you're even aggressive from that perspective."

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This post was written by Luke Carberry Mogan.