Inflation eased substantially for a third month in December due in part to lower fuel prices and a moderating rise in grocery bills.

Consumer prices increased 6.5% from a year earlier, down from 7.1% in November and a 40-year high of 9.1% in June, according to the Labor Department’s consumer price index (CPI).

That marks the slowest annual gain since October 2021. On a monthly basis, consumer prices fell 0.1%, the first monthly decline since May 2020.

We still expect the Fed to increase the Fed Funds rate on February 1st, but potentially just 25 bps. We also expect mortgage rates to continue falling over the next several months. #cpi #inflation