According to a December 13th release by the Bureau of Labor Statistics, the Consumer Price Index (CPI) for November increased by 7.1 percent over November 2021.  The consensus estimate was for a 7.3 percent rise and a 0.3 percent month-over-month increase compared to the 0.1 percent rise from October 2022.  The core CPI, excluding food and energy, increased 6.0 percent against a consensus estimate of 6.1 percent.

Although the lower CPI indicates a reduction in the rate of inflation, the Federal Reserve is intent on raising benchmark interest rates going forward into 2023 to reduce inflation closer to the target of 2 percent.  It is feared that a heavy hand by the Fed may precipitate a mild recession during the first half of 2023.  Hence, the 0.5 percent increase determined by the FOMC in the recently concluded December 2022 meeting.  Fears of a recession arising from future Federal Reserve FOMC raises in rates spooked equity markets with a two-day downturn at the end of the second trading week of December.