Inflation accelerated in December as the US economy showed unexpected signs of strength at the end of 2024.
The Consumer Price Index (CPI) rose 0.4% in the final month of 2024 and rose 2.9% at the end of the year, according to data released by the Labor Department on Wednesday.
Economists had expected annual inflation to reach 2.9% and prices to rise 0.3% in the month, according to consensus forecasts.
The new inflation figures come as President-elect Donald Trump is set to take office on Monday and the Federal Reserve faces a crossroads.
The Fed ended 2024 with its third consecutive rate cut aimed at bringing borrowing costs down from 20-year highs. But as the job market recovers and inflation picks up to end the year, the Fed signaled it may not cut rates as quickly in 2025.
Fed officials are also concerned that President Trump's tariffs and immigration policies could further push prices higher, according to records of internal meetings released by the central bank.
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