The market expects inflation pressure in the United States to remain stable in November, with a 95% probability that the Federal Reserve will keep interest rates unchanged next week.

A key inflation report to be released on Thursday night Beijing time is expected to show that inflation pressure in the United States remains stable, further explaining why Federal Reserve officials continue to be cautious on the issue of interest rate cuts. According to FactSet's forecast, the most closely watched inflation indicator by the Federal Reserve, the core PCE price index for November is expected to rise by 0.2% month-on-month and by 2.8% year-on-year; the overall PCE is also expected to grow by 0.2% month-on-month, with a year-on-year increase of 2.8%. If the predictions come true, it will indicate that the inflation level is running horizontally within a range significantly higher than the Fed's 2% target. While some indicators show potential inflation pressures are slowly cooling down, the core PCE tends to fluctuate more slowly compared to the Consumer Price Index (CPI). Data shows that the CPI has stabilized at a 2.7% year-on-year increase in December 2025. Economists at Citigroup pointed out that the core PCE inflation has shown signs of being slightly hot in the past few months of 2025, but it has displayed a "sticky rather than accelerating" characteristic. At the same time, data disturbances caused by the government shutdown last fall still affect the November readings, and seasonal adjustments may also lead to revisions in the data in the coming months. However, signs of inflation slowdown are accumulating. Wage growth has significantly slowed down, with the Atlanta Fed's wage tracker showing that the annual growth rate is approaching pre-COVID-19 levels. The cooling wage growth makes it more difficult to sustain high service sector inflation, especially against the backdrop of expected further declines in housing costs this year. This requires Federal Reserve officials to balance between conflicting signals - inflation has not worsened, but the slowdown is not strong enough to clearly support a recent interest rate cut. As December and January data will test whether inflation "stickiness" still exists, policymakers are likely to view Thursday's report as an important reference, but not make direct policy decisions based on it. The November PCE report, scheduled to be released at 10am Eastern time on Thursday (11pm Beijing time), may confirm that the US is making progress in achieving price stability, but the progress is not fast enough to trigger a policy shift, meaning the Fed will continue to maintain a "wait-and-see" stance. In terms of the market, investors currently expect a 95% probability that the Federal Reserve will maintain interest rates unchanged at its policy meeting next Wednesday.