1/17/25 SFS Insights: Consumer Price Index Update
- The Consumer Price Index (CPI) rose by 2.9% on an annual basis in December, slightly higher than the forecasted 2.8%. This indicates that inflation remains stubbornly above the Federal Reserve's target of 2%.
- Core inflation, which excludes volatile food and energy prices, increased by 0.2% in December, keeping the annual rate steady at 3.3%.
- The rise in energy prices accounted for over 40 percent of the monthly increase in headline inflation in December.
- The acceleration in December consumer prices will likely force investors to wait until the second quarter for the next cut in rates. If enough households remain on solid financial footing, the economy will continue to grow and keep inflation pressures elevated.
