The consumer price index rose more than expected in December, to 3.4%
US inflation ticked up more than expected in December, rising 0.3 percentage points to 3.4%. This indicates the Fed won’t be cutting interest rates any time soon—unfortunately for all the investors, economists, and consumers craving a soft landing for the economy.
The New York Fed’s president John Williams had already said Wednesday (Jan. 10) that “our work is not done” bringing down inflation. His remarks implied that rate cuts—which would help bring down consumers’ credit card and mortgage payments—might not come as soon as investors had hoped. Analysts had speculated that rate cuts could come as early as mid-2024.
The uptick in inflation reported by the Bureau of Labor Statistics (BLS) on Thursday (Jan. 11) was more than the 0.1 percentage point rise economists had forecast, further hammering home the points made by the Fed a day earlier.
Stubbornly high-and-getting-higher housing prices are to blame for the swell in inflation in December, continuing a months-long trend. Shelter costs contributed over half of the increase in the CPI. Food prices also rose, but all other prices only bumped up slightly.
Inflation is still on a relatively steady path of deceleration from its 40-year-high of 9.1% in 2022.
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