US Core Inflation Cools to 2.6% in December, Easing Pressure on Fed

• US core consumer prices rose less than expected in December, increasing 0.2% monthly and 2.6% annually.
• Both monthly and annual core inflation readings were 0.1 percentage point below market expectations.
• Headline inflation matched forecasts, rising 0.3% monthly and 2.7% annually.
• The Federal Reserve's inflation target is 2% annually, and while moderating, inflation remains above this goal.
• Shelter costs remain a concern, rising 0.4% in December and contributing significantly to the monthly increase.

Why It Matters: US core inflation slowed to 2.6% in December, suggesting moderating price pressures but still above Fed's 2% target.