Joe Biden Says ‘Things Will Get Better’ With Inflation as Rates Slow in November – Update

TO UPDATE: President Joe Biden used news of a slowing inflation rate in November to show cause for optimism.

“Make no mistake: prices are still too high,” Biden said from the White House, where he was flanked by his economic advisers. “We still have a lot to do. But it’s getting better, it’s going in the right direction.”

But some economists say it is too early to say whether inflation has peaked and say more months of data are needed. The Federal Reserve is also expected to raise rates again this week.

EARLIER: Stocks rebounded more sharply in early trade as new data showed inflation slowed more than expected last month after a series of aggressive rate hikes by the Federal Reserve aimed at taming an overheated economy.

The welcome news came ahead of tomorrow’s last scheduled meeting of the year, which is expected to announce a 50 basis point rate hike after four consecutive 0.75% hikes this year, leaving economists, businesses and consumers worried about a looming recession. A handful of media executives have noted a bleak advertising market in recent weeks, with advertisers pulling out due to a lack of economic clarity.

Fed Chairman Jerome Powell will hold a press conference tomorrow afternoon.

The DJIA opened 600 points off premarket highs. Among major media stocks, Disney rose 1.57%; Warner Bros. Discovery rose 4.5%; Comcast rose 3%.

The consumer price index (CPI) rose 7.1% year over year in November and 0.1% from October, according to monthly data released today by the Bureau of Labor Statistics.

Expected higher annualized increase of 7.3% and in line with monthly increase of 0.1%.

Excluding volatile food and energy prices, so-called core inflation rose 6% yoy and 0.2% mo in November, compared with expected increases of 6.1% and 0.3%.

Housing costs accounted for nearly half of the core CPI increase, rising 7.1% for the year.

Not since the 1980s has the Fed raised rates as quickly and as much as it has to try to fight inflation, which also reached a 40-year high. Prices have risen this year for several reasons, including high demand and consumer spending, ongoing Covid-related supply chain issues and other disruptions caused by the war between Russia and Ukraine.