The U.S. Bureau of Labor Statistics has released the December 2025 CPI data today. The annual inflation rate in the US has remained at 2.7% in December 2025, the same as in November and in line with market expectations. The core consumer price inflation rate in the United States was 2.6% in December 2025, the lowest since March 2021, matching November’s rate and falling short of market expectations of 2.7%.
The all items index rose 2.7 percent for the 12 months ending December, the same increase as over the 12 months ending November, the U.S. Bureau of Labor Statistics reported today. The all-items less food and energy index rose 2.6 percent over the last 12 months. The index for all items less food and energy rose 0.2 percent in December.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in December.
The index for shelter rose 0.4 percent in December and was the largest factor in the all-items monthly increase. The food index increased 0.7 percent over the month as did the food at home index and the food away from home index. The index for energy rose 0.3 percent in December.
Indexes that increased over the month include recreation, airline fares, medical care, apparel, personal care, and education. The indexes for communication, used cars and trucks, and household furnishings and operations were among the major indexes that decreased in December.
With the publication of the January 2026 CPI data on February 11, 2026, several index titles will change.
Changes to US CPI Index
The following CPI indexes will have title changes:
- Care of invalids and elderly at home will be changed to home health care
- Technical and business school tuition and fees will be changed to technical and vocational school tuition and fixed fees
- Housing at school, excluding board will be changed to lodging while at school
The US Consumer Price Index (CPI) data for November showed headline inflation rising by 2.7%, as against expectations of 3.1%, while core inflation rose by 2.6%, as against expectations of 3%.
Will US Fed Cut Rates in January
In 2025, the US Federal Reserve implemented three rate cuts of 25 basis points each in September, October, and December, totaling a reduction of 75 basis points, attributed to labor market weakness. However, recent employment data showed slower hiring and a decrease in the unemployment rate, suggesting a stronger job market and diminishing chances of further rate cuts.
Now, the US Fed may not want to cut rates in a hurry, which could reignite inflation. According to the CME FedWatch tool, nearly 95% of futures market participants expect no change in rates at the Fed’s January meeting. The next US Fed FOMC meeting is on January 27-28.
Meanwhile, the pressure on US Fed Chairman Powell may be mounting. Trump has often stated in public that Powell should aggressively lower interest rates, which he has resisted, citing the data-based decision-making process at the central bank.
On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June.