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The consumer price index (CPI) climbed 0.4% last month, marking the largest increase since March, following a 0.3% rise in November, as reported by the Bureau of Labor Statistics. Annually, CPI rose 2.9% through December, the highest since July, up from November’s 2.7%.
Part of the annual CPI rise was due to the removal of lower readings from last year’s calculations. Recent progress in curbing inflation has stalled, with consumer inflation expectations spiking in January amid concerns over tariffs raising goods prices.
(U.S. Inflation Gauges, Source: LSEG DataStream)
No rate cut is expected at the Federal Reserve’s January 28-29 meeting. However, financial markets have increased bets on a rate reduction in June. Since beginning its easing cycle in September, the Fed has cut its benchmark rate by 100 basis points to 4.25%-4.50%. This shift has supported expectations of moderate inflation readings and reinforced predictions for a June rate cut.
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