Editor’s Note: This article has been updated to provide additional details.

U.S. inflation cooled more than expected in November, giving investors renewed confidence that price pressures are easing and strengthening expectations that the Federal Reserve's easing cycle can stay on track into 2026.

The Consumer Price Index rose 2.7% year over year in November 2025, the Bureau of Labor Statistics reported Thursday.

The reading marked a robust decline from September's 3% pace and came in below economists’ expectations of 3.1%.

Core inflation, which excludes food and energy, also surprised to the downside. Core CPI increased 2.6% year-over-year, below forecasts of 3% and hitting the lowest rate since March 2021.

Services inflation showed tentative ...