Inflation Cools, CPI Edges Higher

According to the Bureau of Labor Statistics, the inflation rate cooled while the Consumer Price Index (CPI) edged higher in December.

Key Details: According to the report, the CPI, which excludes food and energy prices, rose 0.4% last month since November, while inflation rose to 2.9% year-over-year.

Key Quote: "Today’s CPI should provide a boost to markets, relieving some of the anxiety that the US is at the beginning stages of a second inflation wave," said Seema Shah, chief global strategist at Principal Asset Management. "For the Fed, this is certainly not enough to prompt a January cut. But, if today’s print were accompanied by another soft CPI print next month plus a weakening in payrolls, then a March rate cut may even be back on the table."

For Context: The current inflation rate of 2.9% is still higher than the 2% favored by the Federal Reserve, though the cooling trend in December offers some optimism for policymakers in 2025.

How The Media Covered It: CNN Business (Lean Left bias) reported that progress on price hikes has led to a surge in the stock market. Fox Business (Lean Right bias) reported that markets still expect the Federal Reserve to hold interest rates steady at the upcoming meeting in February.