Rising Figures: December CPI and Fed Expectations on the Radar

The Consumer Price Index (CPI) surprised on the upside during the month of December, rising 0.3% from the previous month, following November's 0.1% increase. On a year-on-year basis, prices increased by 3.4%, compared to 3.1% in November. This increase was mainly due to higher housing and auto insurance costs. Despite these unfavorable data, markets are ruling out the possibility of a 25 basis point rate cut by the Fed in March. On the other hand, benign producer price data released on Friday helped ease fears that inflation will remain considerably above the Fed's 2% target.

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