U.S. December Inflation Rises 0.3%, in Line With Expectations; Trump Slams Powell
After the publication Donald Trump salmmed Jerome Powell for not cutting interest rates fast enough given the market data.
Quick overview
- Core inflation rose by only 0.2%, below the expected 0.3%, bringing the year-over-year rate to 2.6%.
- U.S. inflation for December matched expectations with a 0.3% monthly increase, resulting in a 2.7% annual rise in headline CPI.
- Wall Street reacted positively, with S&P 500 and Nasdaq futures increasing by 0.2% after the inflation data release.
- Markets are anticipating a potential Federal Reserve rate cut in June following the inflation report.
Core inflation, which excludes food and energy, surprised to the downside, rising just 0.2% versus the 0.3% expected by the market.
This brought the year-over-year core inflation rate to 2.6%, slightly below the 2.7% consensus forecast.
U.S. inflation in December came in line with market expectations, showing a monthly increase of 0.3%. As a result, headline CPI posted an annual increase of 2.7% in 2025. Wall Street reacted positively to the data, with S&P 500 and Nasdaq futures turning up 0.2% after trading in negative territory prior to the release.
Food and beverages rose 0.7% month over month (vs. 0.2% in October, the latest available reading), while the energy component increased 0.3%, despite a 0.5% decline in gasoline prices.
Services prices climbed 0.3% on the month (compared with 0.2% in October), with the shelter component rising 0.4% after a 0.2% increase previously. Transportation prices were unchanged, following a sharp 0.8% rise in October.
After the publication Donald Trump salmmed Jerome Powell: “JUST OUT: Great (LOW!) Inflation numbers for the USA. That means that Jerome “Too Late” Powell should cut interest rates, MEANINGFULLY!!! If he doesn’t he will just continue to be, “TOO LATE!” ALSO OUT, GREAT GROWTH NUMBERS. Thank you MISTER TARIFF! President DJT
Wall Street reaction
Markets welcomed the inflation report. Futures on the S&P 500 and Nasdaq moved up 0.2% after posting modest losses ahead of the data, pushing both indexes to new record highs. Treasury yields also reversed course, with the 2-year yield easing by nearly 2 basis points to 3.52%, while the 10-year Treasury remained stable around 4.17%.
Markets continue to price in the next Federal Reserve rate cut for the June meeting.
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