Inflation in November rose modestly, with housing costs continuing to be a major factor in price increases. However, the Fed is expected to proceed with an interest rate cut next week.

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.

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.