Latest CPI Report Analysis

December's CPI report was released on Wednesday morning right before market hours, detailing a crucial slate of details regarding the economy.

For the first time since July of 2024, inflation growth has slowed lower than 3.3% annually. Between December 2023 and 2024, inflation rose 2.9%, in line with investors' expectations. In December alone, inflation rose 0.4%, up from November's 0.3% but not very significant nevertheless.

Despite the slowing increase of inflation, it has remained well above the Fed's target inflation rate at 2%, meaning that rates will need to stay high in the near future.

This will be our final inflation metric without the influence of the Trump economy. Investors are fearing that when Trump takes office, his low tax policy as well as high tariff policy could surge inflation, causing rates to possibly hike in 2025.

For now, however, this CPI report is a very good sign for the economy. With cooling inflation, the Fed has a better opportunity to make an early-in-the-year rate cut before Trump assumes complete economic power.