Consumer prices rose 2.7 percent over the past year, according to data released Tuesday by the Bureau of Labor Statistics, with the rate falling to 2.6 percent when excluding volatile food and energy costs. The report, the last before the Federal Reserve's meeting in two weeks, indicated a slight deceleration from the beginning of 2025, prior to President Trump's imposition of tariffs on goods from most countries.

The Consumer Price Index (CPI) was notably affected by a decrease in the cost of used cars and trucks, which fell 1.1 percent over the month and increased only 1.6 percent over the year. The November CPI figure was reportedly depressed due to irregularities stemming from a lapse in data collection during the government shutdown.

With the December employment report showing the unemployment rate at 4.4 percent, analysts anticipate that Federal Reserve officials will likely maintain stable interest rates. The Fed had previously cut interest rates three times since September.

The rise in consumer prices reflects the impact of tariffs implemented throughout 2025, particularly on durable goods such as cars and toys. These tariffs, intended to protect domestic industries, have been a subject of debate among economists, with some arguing they stimulate domestic production and others contending they increase costs for consumers.

The Federal Reserve's upcoming meeting will be closely watched for signals regarding future monetary policy. The central bank's decisions will likely be influenced by the latest inflation data, as well as broader economic indicators, including employment and economic growth.