by Simon Moore
Forbes
The Consumer Price Index for December 2024, will be released on January 15 2025 giving insight into recent inflation trends. Current nowcasts suggest that inflation may come in at a 2.9% headline annual rate, marking an acceleration from November’s figures of 2.7% annual inflation. However, core inflation which removes food and energy is forecast to remain flat at 3.3% compared to November. Nowcast data is based on real time observed prices for December, and so these estimates will update over the remaining weeks of the month.
Drifting Inflation
Inflation drifting away from 2%, should that occur, may help confirm the market’s view that fewer interest rate cuts should be expected from the Federal Open Market Committee in 2025. That’s because inflation could remain stuck at closer to 3% than the FOMC’s 2% annual target and that may prompt the FOMC to retain slightly more restrictive interest rates. Inflation would likely be less of a focus for policymakers if the job market weakened significantly, but for now unemployment is only moving up relatively slowly.