Fundamental analysis

Slowing of US Inflation Persisted

In December, inflation in the US decelerated, verifying that the cost surges had come to a halt and prompting the Federal Reserve to reduce the rate of interest increases once more.

A Labor Department report on Thursday showed that the total consumer price index dropped by 0.1% compared to the preceding month, the first decrease in two and a half years, due to the lower costs of energy. The increase on a yearly basis, however, was 6.5%, the lowest since October 2021.

The core Consumer Price Index (CPI), not accounting for food and energy prices, increased by 0.3% in comparison with the prior month and has grown 5.7% since December 2021, which is the lowest rate of expansion in the last year. Economists view the core CPI as a more reliable barometer of inflation than the overall CPI.

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The data, in conjunction with already-low figures from preceding months, indicates that inflation is becoming more and more consistent in its decrease, which could lead to the Federal Reserve increasing the benchmark interest rate by a quarter point at the February 1st meeting. Nevertheless, the responsibility of the Fed is far from complete.

The steady demand for goods and services, in particular, in combination with scarce labor resources is likely to continue to push up prices.

A decrease in the dollar index has been seen following the event.

Analysts anticipate the Federal Reserve will set interest rates higher before pausing to examine the impact of the most severe tightening period in decades on the economy. Policy makers are emphasising the importance of retaining rates at a high level for a considerable amount of time and warning against not taking their determination seriously. Despite officials making statements to the contrary, investors continue to speculate the central bank will lower the rates by the termination of the year.

After the report was published, Patrick Harker, President of the Philadelphia Federal Reserve, commented that the central bank should proceed with quarter-point increases in interest rates “from now on” as it draws closer to the completion of its rate-hiking process.

Andrew Johnson is a seasoned journalist with a keen interest in the commodity market. He is a regular contributor to, where he covers the latest news, trends, and analysis related to the commodity industry. With years of experience under his belt, Andrew has established himself as a reliable source of information on the global commodity market.