Inflation expected to decline in December, possibly not enough to affect Federal Reserve

The U.S. economy is currently facing an uncertain outlook in terms of consumer prices. In December, the consumer price index (CPI) is expected to fall by 0.1% on a monthly basis, while core CPI, excluding energy and food, is anticipated to increase by 0.3%. Even with the expected decrease, the overall year-over-year rate of inflation is still expected to remain at 6.5%. As the Fed's next interest rate decision is set for February 1, Thursday's CPI report has become a major event for financial markets.

The futures market currently expects the central bank to raise rates by a quarter point at its next meeting, although some traders are hoping for a bigger decrease. Additionally, Federal Reserve President Susan Collins said in an interview with The New York Times that she is leaning toward a quarter-point hike. The overall economic outlook suggests that while consumer inflation is expected to remain high, the Fed may be leaning toward a more dovish stance in the future.


More from Press Rundown