This morning’s CPI report for November came in soft. Core CPI advanced 0.12%, and the 12-month rate fell a tenth, back to 1.7%. There was an outsized 1.3% decline in apparel, a category making up about 4% of core CPI, its largest decrease in almost 20 years. Still, as time has passed and with core inflation continuing to run below its objective, the FOMC’s willingness to look through outsized declines in certain categories appears to be diminishing. That said, the FOMC will certainly still raise the fund’s rate target range at its meeting today. But this report will be a topic of active discussion and might affect the projections of some participants, at least marginally: Participants submit their macro and funds rate projections the Friday before the meeting but are permitted to revise them. Nevertheless, this report will be considered in the context of a preceding couple of firmer readings, and we still anticipate that FOMC participants’ median projection for core PCE inflation in 2018 will be within a couple of tenths of 2%. If that is the case, the implication would be that the consensus remains that most of the slowdown in core inflation is likely to prove transitory.