According to the latest Bureau of Labor Statistics report, the Consumer Price Index (CPI) edged down to an annual rate of 3.1% in November, aligning with market expectations.

The inflation report comes right before the imminent start of the Federal Open Market Committee (FOMC) meeting, scheduled to wrap up Wednesday with the interest rate decision and Chair Jerome Powell's press conference.

Key Highlights From November Inflation Report:

• The annual CPI inflation rate eased to 3.1% in November, down from October's 3.2% and in line with the expected 3.1%.
• On a monthly basis, the CPI increased by 0.1%, up from the flat reading expected and October's figure.
• The annual core inflation CPI stood at 4.1% in November, rising from both October and the previous 4%.
• On a monthly basis, the core CPI increased by 0.3%, up from October's 0.2% and in line with estimates.

Before the release of the inflation report, the markets had incorporated the expectation that the Federal Reserve would commence a cycle of rate cuts in May 2024, with the potential for up to five rate reductions by December 2024.

Following the release of the November inflation data, the U.S. dollar, as monitored by the Invesco DB USD Index Bullish Fund ETF (UUP  ), experienced a dip.

In the meantime, equity futures saw a decline, with S&P 500 contracts showing a 0.3% increase an hour before the opening bells in New York.