The BareStory
The U.S. Bureau of Labor Statistics reported Tuesday that the Consumer Price Index (CPI) rose at an annual rate of 2.7% in December 2025, remaining unchanged from the previous month. While the figure met economic forecasts and marks the lowest level since July, it persists above the Federal Reserve’s 2% target. Core inflation, which excludes volatile food and energy sectors, increased by 2.6% over the past 12 months.
Specific price movements varied significantly by category. Data shows that egg prices fell approximately 20% compared to the prior year. In contrast, prices for coffee and beef surged nearly 20% and 16% respectively, while utility gas services rose 11% annually. Some economists, including Mark Zandi of Moody's, suggested that tariffs implemented by the Trump administration contributed to price pressures, though analysts noted that many businesses absorbed these costs rather than passing them fully to consumers.
The release of the economic data coincides with reports that the Department of Justice has opened a criminal probe into Federal Reserve Chair Jerome Powell. The investigation reportedly centers on allegations that Powell provided false testimony regarding cost overruns for a renovation of the central bank's headquarters. Powell denied the accusations in a video message, characterizing the inquiry as a politically motivated attempt to influence monetary policy. A spokesperson for Attorney General Pam Bondi stated that U.S. Attorneys have been instructed to prioritize investigating abuse of taxpayer dollars, while the White House denied that President Donald Trump was involved in the investigation.
Market analysts believe the latest inflation figures will likely prompt the Federal Reserve to hold interest rates steady at its meeting later this month. The central bank cut rates three times late last year to address a cooling labor market, but experts note that persistent inflation may limit immediate further reductions. Investors currently see a high probability that rates will remain in the 3.5% to 3.75% range in January.
How it may affect me
As a U.S. reader:
You will likely encounter mixed costs at the store, paying about 20% less for eggs but significantly more for beef, coffee, and utility gas services.
Your borrowing costs for loans and credit are expected to hold steady, as the Federal Reserve is unlikely to cut interest rates further this month.
Retail prices for some goods may remain stable for now, as reports indicate businesses are currently absorbing tariff costs rather than passing them fully to shoppers.
The criminal probe into the Federal Reserve Chair could affect future economic strategy, as the investigation raises concerns about potential political influence on monetary policy.
