December 2025 US Consumer Price Index Rise Backs Fed Rate Pause This Month
The December 2025 US Consumer Price Index rise supports the Federal Reserve's decision to pause rate cuts this month. Explore the latest inflation data and market trends.
Your borrowing costs aren't dropping just yet. According to Reuters, the December 2025 US consumer prices rose more than expected, providing a solid case for the Federal Reserve to pause interest rate hikes—or cuts—during their meeting this month. The data suggests that inflation remains stickier than many investors had hoped.
Impact of the December 2025 US Consumer Price Index Rise on Fed Policy
The latest figures show a persistent upward nudge in costs for everyday goods and services. Reuters reports that this inflationary pressure makes a pivot to lower rates unlikely in the immediate future. Analysts point out that while the headline numbers aren't exploding, they aren't cooling fast enough to hit the 2% target smoothly.
Key Inflation Metrics and Market Expectations
| Metric | December Figure | Market Forecast | Likely Fed Action |
|---|---|---|---|
| CPI (Headline) | Rising | Flat | Pause |
| Core CPI | Steady | Slight Drop | Hold |
| Interest Rate | Current Level | 25bps Cut | No Change |
The market's focus has shifted entirely to the Fed's upcoming announcement. With the CPI showing strength, the probability of a rate cut this month has plummeted to below 20%, as traders brace for a longer wait before any monetary easing begins.
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