US Inflation Holds Steady at 2.7% in December, Fed Remains Cautious on Rate Cuts

• US consumer price inflation remained unchanged at 2.7% in December, as reported by the Bureau of Labor Statistics.
• This indicates steady inflationary pressure in the final months of 2025, staying above the Federal Reserve's 2% target.
• Core inflation, excluding volatile food and energy prices, stood at 2.6%, showing a gradual but incomplete cooling of price pressures.
• The steady inflation reinforces the need for a prolonged period of restrictive monetary policy by the Fed.
• Policymakers are expected to maintain elevated rates for longer, awaiting greater confidence that inflation is firmly moving towards 2%.

Why It Matters: US inflation held steady at 2.7% in December, keeping the Fed cautious about immediate rate cuts.