While food and energy prices may soon hit consumer's wallets given the recent surge in energy and agriculture commodities, "deflation is still a greater threat than inflation," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, adding that "there is far too much slack in the economy" for for inflation to kick in.
0:00/2:13Luxury retail comeback Ataround 1%, inflation is still considered too low, and can raise some concerns of deflation -- or falling prices. That's why the Federal Reserve is trying to raise inflation slowly, to reach its target of about 2% per year.
Following its final meeting of the year Tuesday, the central bank reiterated its controversial plan to stimulate the economy by buying up long-term Treasuries in order to bring down interest rates.
But critics of that policy fear that it could push up asset prices and lead to higher inflation down the road.
So far those fears have not come true. In October, core CPI rose a measly 0.6%-- the smallest increase on record. And Wednesday's numbers are unlikely to lend more support to the opposition.
On a monthly basis, CPI rose 0.1% in November, marking a slowdown from the previous month. Economists surveyed by Briefing.com expected a 0.2% rise. Core CPI also rose 0.1% during the month, in line with economist forecasts.
Inflation (CPI)Fed’s hand strengthens on tame inflation data
