The December CPI marked the sixth-straight monthly decline, as prices rose 6.5% annually, down from 7.1% in November 2022. However, Simona Mocuta, Chief economist at State Street Global Advisors, said, “We know that we won’t get the same kind of support from gasoline prices, so don’t expect the next report to look as good as this one.”
St. Louis Fed President James Bullard recently noted that inflation is still far above the Fed’s 2% goal, and he would like the central bank’s policy rate to exceed 5% “as soon as possible.” As indicated by the Fed officials, interest rate hikes, though slow in pace, are likely to continue for this year, enhancing the chances of the much-anticipated recession.
