Inflation has risen since the summer and raised anxiety at the Federal Reserve, but a welcome slowdown in housing costs could be just what the doctor ordered.

The likelihood of a third Fed rate cut got higher with Wednesday’s CPI report, which met expectations from economists.

The Federal Open Market Committee is most likely to cut interest rates again on December 18 to 4.25% to 4.5%, according to fixed income markets.

The market sees the probability of another 25 basis point interest rate cut at next week's Federal Reserve meeting as rising despite inflation ticking higher in November.

Inflation is moving in the wrong direction. U.S. inflation picked up for a second straight month in November on a rise in food and gasoline prices, underscoring that the final stretch of the Federal Reserve's two-year battle against sharply rising prices has become more challenging.

Inflation sped up last month, but the details suggested cooling ahead. Next week, the Fed will make its final rate decision for 2024.

The Fed will meet next week, and the mild uptick is not expected to derail an anticipated quarter-point reduction in interest rates.