The Consumer Price Index rose by 0.2% for the month of October, a reversal from two straight months of retail price declines, this according to the Labor Department and could provide additional impetus the Fed needs to raise the Fed Funds rate at their mid-December FOMC meetings. It’s been a guessing game with the Fed as conflicting data over the past several months has kept the Fed on the sidelines and keeping equities and securities in check for much of the year.

The Fed wants to see an annualized inflation rate of 2.0%  and for the previous 12 months leading up to October the rate is nearly there, at 1.9%. Analysts are still trying to figure out the October jobs data but the Fed has said for much of the second half of this year that a rate increase in 2015 is almost a guarantee and the CPI data supports that action, at least in terms of what the Fed pays attention to, but there are still signs the economy isn’t quite ready for a rate increase at all.

Industrial production for October actually fell 0.2% after a similar decline in September with most expecting a slight increase in factory output.* Mortgage rates for real estate investors look to stay within a very tight range over the next several months. If the Fed does in fact raise rates next month, with all the conflicting economic data being reported and moving into the dead of winter in Q1 2016, it won’t be surprising for the Fed to leave rates alone in the first half of 2016 until more convincing as well as consistent economic numbers are tallied.

 * November 17, 2015