US Inflation Stays High in December Amid Shutdown Recovery, Fed Faces Political Pressure

• US consumer prices likely remained elevated in December, with a 2.6% year-over-year rise expected, slightly down from November's 2.7%.
• Monthly prices are projected to increase by 0.3%, exceeding the Federal Reserve's 2% inflation target.
• Data collection challenges due to a six-week government shutdown in the fall make December's figures harder to predict.
• Core prices (excluding food and energy) are also expected to rise 0.3% monthly and 2.7% annually, up from 2.6% in November.
• The Federal Reserve faces political pressure from President Trump regarding interest rate cuts, while also dealing with a Department of Justice subpoena related to Chair Powell's testimony.

Why It Matters: US inflation remains elevated, posing challenges for the Federal Reserve amidst political pressure and data recovery.