STORY: U.S. inflation data out Wednesday showed consumer prices ticked up more than expected in December amid higher gas prices.
The Labor Department’s consumer price index rose 0.4% last month, slightly more than economists polled by Reuters had expected, putting the annual inflation rate at 2.9%.
But the so-called core CPI, which excludes volatile food and energy costs, was 3.2% – down from the month before and better than the forecast.
That helped lift the stock market on Wednesday.
Traders were pricing nearly even odds that the Federal Reserve will cut interest rates twice by the end of 2025, with the first reduction to come in June.
No rate cut is expected at the Fed’s January policy meeting.
Last year, the central bank forecast four rates cuts for 2025, but later scaled back that prediction to two.
Fed policymakers see some of the proposed policies of President-elect Donald Trump as inflationary, such as broad tariffs on imported goods and mass deportations of undocumented immigrants.
