Cleveland Fed Predicts November Inflation Spike to 4.25%

The Federal Reserve Bank of Cleveland projects a reacceleration of inflation for November 2026, with the Consumer Price Index expected to reach an annualized 4.25%, up from a projected 3.74% in October. The Personal Consumption Expenditures index, the preferred gauge of the Federal Reserve, is projected to rise to 4.03%, while Core PCE is expected to reach 3.31%.

These inflationary pressures are attributed to a phenomenon termed Trumpflation, driven by tariffs implemented by President Donald Trump in 2025 and the ongoing war with Iran. The conflict has resulted in an eight-month closure of the Strait of Hormuz, halting one-fifth of the global crude oil supply. Economists from the Federal Reserve Bank of New York reported that the 2025 tariffs alone increased goods price inflation by 2.9 percentage points.

Federal Reserve Chair Kevin Warsh and the Federal Open Market Committee may respond to these trends with more aggressive interest rate hikes. Such a move would increase the cost of mortgages, auto loans, and credit cards for American families, whose costs for everyday necessities remain more than 30% above early-2021 levels. Analysts warn that higher rates could also threaten the broader four-year stock market rally and the debt-financed build-out of artificial intelligence infrastructure.