The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) for December showed headline inflation holding steady at an annual rate of 2.7%, matching both November's pace and economists' expectations. The monthly increase was 0.3%, consistent with recent trends.
Core inflation, which excludes volatile food and energy prices, came in slightly cooler than anticipated, rising just 0.2% month-over-month and 2.6% year-over-year—both figures 0.1% below forecasts. This data reinforces the view that inflation remains "sticky" but contained, with progress toward the Federal Reserve's 2% target occurring slowly. The report indicates that price pressures have neither meaningfully accelerated nor eased in recent months, remaining in what economists call the "last mile" of disinflation.
The inflation landscape continues to be driven by persistent services categories, including shelter, medical care, and transportation, while goods prices have generally stabilized or fallen. The December reading follows a period of data normalization after a 43-day federal government shutdown earlier in the autumn led to unusually soft figures.
The crypto market reacted positively to the release. Bitcoin (BTC) jumped 0.3% shortly after the data was published, according to CoinCodex. Similarly, the rest of the top 10 cryptocurrencies recorded minor gains in the minutes following the release, contributing to an overall increase of over 1% in the total crypto market capitalization over the past 24 hours.
Federal Reserve officials, including New York Fed President John Williams, have recently suggested that current interest-rate settings are "well positioned" to guide inflation back to target. With December's CPI broadly matching expectations, analysts say the report is unlikely to alter the Fed's near-term policy stance. Some major banks, including JPMorgan, have even argued that the Fed may avoid cutting rates entirely in 2026 if inflation proves stubborn.
The report lands amid signs of cooling economic momentum, including weaker-than-expected December payroll growth—the slowest calendar-year job gains since the post-pandemic recovery. Major forecasters like The Conference Board and BNP Paribas expect U.S. GDP growth to stabilize around 2%-3% in 2026, with inflation gradually easing.
Attention now shifts to upcoming data, including the January CPI report, Personal Consumption Expenditures (PCE) inflation figures, and the March Federal Open Market Committee (FOMC) meeting for clearer signals on the timing of any potential policy adjustments. Fed Chair Jerome Powell has indicated that the peak impact of tariffs on price pressures is expected to materialize in the first quarter of 2026, making the next few inflation reports particularly critical.
