US Inflation Data Shows Annual Increase, Core Prices Cool

US inflation data revealed an annual increase of 2.9% in December, up from 2.7% in November, according to the Bureau of Labor Statistics (BLS).

The figure aligned with market expectations, while monthly inflation rose by 0.4%, following a 0.3% uptick in the prior month. Core inflation, which excludes food and energy, grew by 3.2% year-on-year, slightly below both November’s 3.3% and analysts’ forecasts. On a monthly basis, core inflation increased by 0.2%.

The release of these figures had an immediate impact on financial markets. The US Dollar Index (DXY) slipped below the 109.00 mark, hitting new multi-day lows in response to the data.

Earlier projections had anticipated December’s CPI to rise by 2.9% annually and core inflation to hold steady at 3.3%. Analysts suggested the report might reinforce the Federal Reserve’s current stance on monetary policy, with no immediate rate adjustments expected at the January meeting.

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The Federal Reserve’s December meeting minutes highlighted concerns over persistent inflationary pressures. Officials noted potential challenges posed by shifts in trade and immigration policies, which could complicate efforts to control inflation and shape the broader economic outlook. Analysts at TD Securities had predicted a slight decline in core inflation due to falling goods prices, potentially offset by rising housing costs. The December CPI figures seem to affirm a steady but cautious inflationary trend heading into the new year.

Alexander Zdravkov