Fresh inflation data released Wednesday made clear that the Federal Reserve’s fight against rapid price increases was not over. Still, the details of the report probably gave central bank officials enough confidence to cut interest rates at their meeting next week.

The consumer price index climbed 2.7% in the year through November, just slightly faster than the 2.6% reading in October. After stripping out volatile food and fuel costs for a better sense of the underlying inflation trend, the pace of price increases was unchanged.

But drilling into the details of the report, a long-awaited slowdown in housing cost inflation materialized last month. Because rental costs make up such a big chunk of overall inflation, that could pave the way for cooler inflation readings going forward.

Taken as a whole, the figures are likely to reaffirm the Fed’s view that after several months of little to no progress, price increases have more room to slow.

While inflation is much cooler than the 9.1% peak it reached in 2022, it remains above the Fed’s goal. Central bankers aim for 2% inflation, a target they define using a different but related index, the personal consumption expenditures measure. That will come out on Dec. 20, so this is the last big inflation report officials will have in hand before their Dec. 17-18 meeting.

“It gives the Fed enough confidence to cut interest rates on the 18th,” said Kathy Bostjancic, chief economist at Nationwide. “Then, I think, they pause a bit in early 2025. I don’t think they cut rates in January.”

The Fed raised rates sharply in 2022 and into 2023, making it more expensive to borrow money in a bid to cool consumer and business demand. By hitting the brakes on growth, they hoped to wrestle rapid inflation back under control.

But officials wanted to avoid overdoing it, slowing the economy so much that they caused a recession. Given that, they began to cut interest rates in September as the job market showed signs of cooling and as inflation came down.

Rates are now set to about 4.6%, which is well above the roughly 2.9% rate that officials think would be enough to keep the economy growing steadily and sustainably over time. As a result, policymakers have been clear that they still expect to cut rates further.

Now the question, increasingly, has been how much and how quickly borrowing costs will come down.

Since September, the last time the Fed released economic forecasts, growth has been stronger than expected, the job market has shown signs of stabilizing, and inflation has proved somewhat sticky.

Investors think that combination is likely not enough to derail the Fed’s third and final rate cut of 2024: After Wednesday’s inflation data, markets were almost unanimously betting on a reduction.

But the path ahead in 2025 in murkier. While September’s forecasts had suggested that officials would make a full percentage point of rate cuts next year, they could dial that back somewhat when they release a fresh set of quarterly projections next week.

“Growth is definitely stronger than we thought, and inflation is coming a little higher,” Fed Chair Jerome Powell said at The New York Times’ DealBook Summit last week. “The good news is that we can afford to be a little more cautious as we try to find neutral.”

Wednesday’s data backs up the idea that inflation is likely to come down, but that the Fed has not yet fully stamped it out — a recipe for both optimism and caution.

Economists tend to watch how much the price index climbed compared with the previous month for a sense of how trends are shaping up. In November, overall monthly inflation picked up to 0.3%, up from 0.2% previously, while the core number held steady at 0.3%.

But while those figures showed no real progress, the cool-down in rent prices suggested that inflation could come down going forward.

Economists have waited months for housing costs to moderate, and that finally happened in November. Measures that track cost increases for both owned and rental housing climbed at the slowest monthly pace since 2021.

Even better, “this is not a one-off story,” Omair Sharif, founder of Inflation Insights, wrote of the cooler rents in an analysis after the report. “It looks broad-based.”