U.S. consumer price growth held steady in December, matching November’s 2.7% rise in the headline CPI and a 0.3% month‑on‑month increase. After stripping volatile food and fuel items, the core CPI ticked up 2.6% annually and 0.2% monthly, slightly below forecasts. The data arrive just before the Federal Reserve’s policy meeting on January 27‑28, where officials are widely expected to keep the federal funds rate in the 3.50%‑3.75% range. FedWatch shows a 95% probability that borrowing costs will stay unchanged.

Last year, the central bank slashed rates several times to support a softening labor market, yet inflation has stubbornly stayed above the 2% target. Market participants now debate whether further rate cuts could spark a price surge, while investors anticipate two more rate reductions in 2026, though the timing remains uncertain. The steady inflation reading signals that the Fed’s tightening cycle may pause, but the lingering pressure on prices keeps the policy debate alive.