The Consumer Price Index (CPI) rose 6.5% in December, down from 7.1% in November and from a peak of 9.1% in June last year. This indicates that inflation is cooling significantly. However, even though inflation decreased in December, Fed policymakers have signaled a slower pace of rate increases but no relaxation.
At the upcoming meeting of the Federal Reserve, Susan Collins, the president of the Boston branch, favored raising interest rates by 0.25 percentage points. In agreement with this comment, Philadelphia Fed President Patrick Harker stated that rate increases “going forward” should be 25 basis points.
