In November, the US inflation data was released, and the market reaction was surprisingly muted. Exchange rates and interest rates barely moved, the Federal Reserve's expectation of a rate cut for the entire 2026 year only increased by 3 basis points, and the US dollar index fluctuated by only 30 points, which is far from the sharp volatility that such a large data discrepancy would typically cause. What's going on?

**The data itself is problematic**

The government shutdown prevented the Bureau of Labor Statistics (BLS) from collecting most of the price data for October, directly affecting the accuracy of the November data. The most absurd part is that for indicators collected in even-numbered months, the BLS simply assumed that inflation changes from August to October were 0%, and then carried that over to November. Rent and OER (Owner's Equivalent Rent), which are major contributors to the CPI, were also severely underestimated due to missing October data. This missing inflation is likely to be gradually compensated for in December and subsequent data.

**Timing issues**

The collection of November inflation data was delayed by two weeks, coinciding with the US Thanksgiving discount season. Consumers shopping heavily during discounts directly lowered the November CPI. Conversely, the December CPI is likely to accelerate as a result.

**The market has already priced in expectations**

Recently, Trump explicitly stated that the next Federal Reserve Chair must be an advocate of "large rate cuts." Several popular candidates like Haskett, Waller, and Waugh have recently indicated that there will be significant rate cuts next year. Coupled with the recent two-week weakness in the US stock market, the market has already priced in a "Fed put" at the interest rate level. Therefore, even if the CPI data is low, there are no new surprises.