Prices across a broad range of goods and services edged higher in November but were mostly in line with expectations, further easing pressure on the Federal Reserve.

The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%.

While the monthly rate indicated a pickup from the flat CPI reading in October, the annual rate showed another decline after hitting 3.2% a month earlier.

Excluding volatile food and energy prices, core CPI increased 0.3% on the month and 4% from a year ago. Both numbers were in line with estimates and little changed from October.

A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%, boosted by a 0.4% jump in food away from home. On an annual basis, food rose 2.9% while energy was down 5.4%.

Shelter prices, which make up about one-third of the CPI weighting, increased 0.4% on the month and were up 6.5% on a 12-month basis. However, the annual rate has showed a steady decline since peaking in early 2023.

The release comes as the Federal Reserve begins its two-day policy meeting, during which it is expected to hold interest rates steady for the third consecutive time.

However, markets are looking more closely at what the Fed signals for the future.

After hiking rates 11 times since March 2022, policymakers are expected to signal that the policy tightening is over, with the next step likely to be cuts at a still-to-be-determined pace. Following the release, futures pricing continued to indicate virtually no chance of any further rate hikes, with the first cut likely to happen in May.

In fact, futures markets indicate the Fed will ease aggressively in 2024, cutting rates up to 1.25 percentage points by the end of the year. Respondents to the CNBC Fed Survey, though, think the central bank will move at a more measured pace, cutting about three times, assuming quarter percentage point increments.

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