The latest Consumer Price Index (CPI) report met economists' expectations, showing a month-over-month inflation rise of 0.3% and a year-over-year increase of 2.7% in November. 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.

What does this all mean for the Federal Reserve just one week out from the central bank's final policy meeting of 2024?

"From the Fed's point of view, the unfortunate thing is that it does show that we've had sort of a stall out in the progress that was made earlier on inflation," Former Cleveland Fed president Loretta Mester tells Yahoo Finance's Jennifer Schonberger. Mester adds that this development will likely be "a bit of a concern to the Fed," suggesting they may be slowing down their interest rate-cutting efforts.

Mester notes current projections anticipate another rate cut in 2024, followed by four 25-basis-point cuts in 2025. However, she believes this monetary policy path will need to be "rethought" due to the "underlying momentum in the economy."

"It will probably take a little bit more restrictive policy than they thought in September," Mester states. While she doesn't anticipate the Fed to raise interest rates, she suspects the policy path will be "firmer" than previously projected in September.

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This post was written by Angel Smith