Prices rose 2.7% in December from a year ago, a sign that inflation continues rising but in line with the pace seen in recent months.

The report is the last of its kind before the Federal Reserve meets again in two weeks. With the employment report for December showing the unemployment rate sinking back to a relatively healthy 4.4 percent, officials are expected to hold interest rates steady after cutting them three times since September.

The latest release of inflation statistics shows price growth was in line with what economists expected after the government shutdown resulted in a confusing November reading. The consumer price index climbed 2.

Stocks are holding near their records on Wall Street following the latest update on inflation, one that could keep the door open for the Federal Reserve to cut interest rates further later this year.

U.S. inflation slowed to 2.7% in 2025, the lowest since 2020, as the Fed cut rates and tariffs added costs to some household goods.

Inflation held steady in December at 2.7%, wrapping up a year of persistent price increases that have put a squeeze on Americans’ budgets for four years.

Federal Reserve officials are hedging about how much rising productivity will help return inflation to the U.S. central bank's 2% target, reiterating this week they need to keep interest rates at current levels until it becomes clearer that price pressures will ease.