{"id":765,"date":"2025-01-28T03:16:39","date_gmt":"2025-01-28T03:16:39","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/cpi-rose-in-december-a-sign-the-feds-inflation-fight-has-stalled\/"},"modified":"2025-01-28T03:16:39","modified_gmt":"2025-01-28T03:16:39","slug":"cpi-rose-in-december-a-sign-the-feds-inflation-fight-has-stalled","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/cpi-rose-in-december-a-sign-the-feds-inflation-fight-has-stalled\/","title":{"rendered":"CPI Rose in December, a Sign the Fed\u2019s Inflation Fight Has Stalled"},"content":{"rendered":"<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Consumer prices rose more quickly in December, the latest sign that the Federal Reserve\u2019s fight against inflation may have stalled.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The Consumer Price Index rose 0.4 percent from November, and was up 2.9 percent from a year earlier, the Labor Department said on Wednesday. It was the fastest one-month increase in overall prices since February, driven in part by another sharp rise in the price of eggs and other groceries.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The \u201ccore\u201d measure of inflation, which strips out volatile food and fuel prices to give a better sense of the underlying trend, was more encouraging: The index rose 3.2 percent from a year earlier after three straight months of 3.3 percent gains. Forecasters had not expected core inflation to slow.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Inflation has cooled substantially since the middle of 2022, when it hit a four-decade high of more than 9 percent. More recently, however, progress has slowed, or even stopped outright: By some measures, inflation hardly improved in 2024.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cWhen you step back and look at the overall state of inflation, we\u2019re not really going anywhere,\u201d said Sarah House, senior economist at Wells Fargo. \u201cWhile there has been progress, the pace has been really disappointing.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Prices continued to rise in some of the categories that matter most to consumers. Grocery prices, which were relatively flat in late 2023 and early 2024, are rising again, led by the price of eggs, which is up by more than a third over the past year. Gas prices jumped 4.4 percent in December, although they were lower than a year ago.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">And with inflation proving more stubborn than policymakers had hoped, Americans will likely need to wait longer to see lower interest rates on their mortgages, car loans and credit card balances.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Officials at the Fed have voiced increasing concern about the slow progress on inflation, and while some of the details in Wednesday\u2019s report were encouraging, the data is unlikely to do much to ease those concerns. Stock prices rose and bond yields fell on Wednesday as investors breathed a sigh of relief that the inflation data wasn\u2019t worse. The S&amp;P 500 rose 1.8 percent, its best one-day performance since the election in November. The 10-year Treasury yield, which underpins interest rates from mortgages to corporate loans, fell 0.15 percentage points, its biggest one-day fall in almost six months.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">At the same time, the continued strength of the labor market \u2014 including data released last week showing unexpectedly strong job growth in December \u2014 has made policymakers less worried that their efforts to rein in price increases were leading to layoffs or causing damage to the broader economy.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">As a result, investors widely expect the central bank to hold interest rates steady at its meeting later this month. That would break a streak of three consecutive rate cuts, and some forecasters now say that policymakers may not lower rates at all this year.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWith a labor market that\u2019s stabilizing, with inflation already above target and with risks further to the upside, I think it\u2019s difficult to make a case to keep cutting,\u201d said Aditya Bhave, an economist at Bank of America.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Most Fed officials have said they still expect inflation to cool gradually, and economists agree that there\u2019s reason to be optimistic. Inflation in housing \u2014 by far the biggest monthly expense for most families, and one of the most stubborn categories of consumer prices \u2014 has finally begun to ease: Shelter prices were up 4.6 percent in December from a year earlier, the smallest 12-month increase in nearly three years. Services prices outside housing \u2014 a measure that Fed officials have watched closely in recent years as an indication of where overall inflation is headed \u2014 also continued to cool. And data released on Tuesday showed that wholesale prices rose more slowly in December.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But policymakers are facing a new source of uncertainty: President-elect Donald J. Trump. The incoming president has promised to impose steep tariffs on imports, restrict immigration and cut taxes \u2014 policies that economists warn could push up prices further, although it is unclear by how much. Some Fed officials have said they are already factoring those policies into their outlook for inflation.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">With price increases proving stubborn and the labor market looking strong, policymakers are unlikely to cut rates again until they get a clearer picture of what policies the new administration is adopting and how they are affecting the economy, said James Egelhof, chief U.S. economist at BNP Paribas.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe Fed has the luxury of a little bit of time to wait for President Trump to take office and to see exactly what happens,\u201d he said.<\/p>\n<p class=\"css-798hid etfikam0\">Joe Rennison<!-- --> contributed reporting.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Consumer prices rose more quickly in December, the latest sign that the Federal Reserve\u2019s fight against inflation may have stalled. The Consumer Price Index rose 0.4 percent from November, and was up 2.9 percent from a year earlier, the Labor Department said on Wednesday. It was the fastest one-month increase in overall prices since February, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":766,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[466,468,470,320,471,467,469,472],"class_list":["post-765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cpi","tag-december","tag-feds","tag-fight","tag-inflation","tag-rose","tag-sign","tag-stalled"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=765"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/765\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/766"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}