December’s monthly decline in the consumer price index gets the Federal Reserve a step closer to beating inflation, though they’re highly unlikely to signal an easing of policy anytime soon. The key inflation gauge fell 0.1% for the month, in line with market expectations and the biggest drop since April 2020. Though the CPI for all items is still 6.5% ahead of where it was a year ago, the arc has been steadily lower — from its peak around a 9% annual rate in June 2022 to a steadily declining rate amid a sharp drop in gas prices and some serious interest rate increases from the Fed. The question now is how much more evidence policymakers will need to see before they take their foot off the brake. “If they’re doing a forecast, which is what they should be doing, it strongly argues that their rate increases should be coming to an end soon,” said Mark Zandi, chief economist at Moody’s Analytics. “There’s nothing not to like about this report. Inflation is going to come in here.”
Source: CNBC
