Global Economy
U.S. Inflation Holds Steady at 2.7% in December 2025, Core Rate Drops to 2.6%
U.S. consumer‑price inflation held at 2.7% year‑over‑year in December 2025, exactly as markets had forecast. The steadiness was driven by a pull‑back in energy costs—particularly lower gasoline prices—which offset price gains elsewhere. Yet food and housing costs kept climbing, preserving upside pressure on the overall cost‑of‑living index. Core CPI, the Fed’s preferred gauge that excludes food and energy, fell to 2.6%, its lowest level since 2021, with a modest 0.2% monthly rise, better than expectations. Analysts view the pause as a sign that inflation may be anchoring, but warn that persistent food and shelter price pressures could keep headline inflation from falling further.
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U.S. consumer‑price inflation stayed unchanged at 2.7% year‑over‑year in December 2025, matching market expectations.
The stability is largely attributable to a drop in energy prices, especially lower gasoline costs, which offset price increases in other categories.
Nevertheless, food and housing prices continue to climb, keeping upward pressure on the overall cost of living.
Core CPI — the Federal Reserve’s preferred gauge that excludes volatile food and energy items — fell to 2.6%, its lowest level since 2021, while the monthly rise was limited to 0.2%, better than analysts predicted.
While the pause suggests inflation may be anchoring, analysts caution that persistent food and shelter price pressures could prevent headline CPI from falling further.