Federal Reserve policymakers on Thursday expressed relief that inflation continued easing in December, paving the way for a possible step down to a quarter-point interest rate increase when the U.S. central bank meets in just under three weeks.
U.S. consumer prices fell in December in the first month-to-month decline in more than 2–1/2 years, and underlying inflation slowed, government data showed on Thursday. In the 12 months through December, the so-called core CPI increased 5.7 percent, the smallest gain since December 2021 and fresh evidence the Fed’s aggressive rate increases are having the desired effect.
“We are in fact constraining the economy and presumably in the process constraining inflation. That means for me I can be a little more nuanced,” in deciding the size of upcoming rate increases, Richmond Federal Reserve president Tom Barkin said in comments to reporters in Richmond. After raising rates by half a point at its December meeting, Barkin said he was “in concept supportive of a path that is slower but longer and potentially higher” depending on how inflation behaves….