The U.S. Consumer Price Index (CPI) rose by 2.9% year-over-year in December 2024, matching market expectations.
Headline Results
The U.S. Consumer Price Index (CPI) increased by 2.9% year-over-year in December 2024, in line with market expectations, according to data from the U.S. Bureau of Labor Statistics. On a monthly basis, the CPI rose by 0.4%, also meeting forecasts. The core CPI, which excludes volatile food and energy prices, rose 3.2% year-over-year, slightly below the expected 3.3%, with a modest 0.2% monthly increase, underperforming the forecast of 0.3%.
Economic Implications
The latest CPI data may influence the Federal Reserve's monetary policy, as it focuses on achieving its 2% inflation target. The slightly lower-than-expected core CPI could lead the Fed to be cautious about further interest rate hikes in 2025. The alignment with expectations has provided reassurance to financial markets, reducing uncertainty.
Expectations for 2025
Analysts expect CPI growth to continue moderating in 2025 as tighter monetary policies take effect. The focus will remain on core CPI trends as an indicator of underlying price pressures. Key factors to watch include energy market fluctuations and wage growth, which may continue to exert pressure on inflation.
The 2.9% rise in December's Consumer Price Index reflects progress in managing inflation. Despite the core CPI slightly missing forecasts, the data suggest cooling price pressures and a steady path toward economic stability.
