U.S. inflation likely worsened last month on the back of higher prices for gas, eggs, and used cars, a trend that could make it less likely that the Federal Reserve will cut its key interest rate much

The path of inflation proved bumpier than expected in December, with price growth picking up more than economists had forecast. The consumer price index climbed 2.9% year over year in December, according to data released Wednesday by the Bureau of Labor Statistics.

Inflation is proving stickier than expected, which could cause Fed to hit pause button on more interest rate cuts.

With energy and food inflation markedly stronger in December, the overall reading for the consumer price index surged last month. But taking those categories out of the mix revealed a far more benign inflation reading.

Economists expected consumer prices to rise 0.3% on a monthly basis in December, and for the annual inflation rate to rise to 2.8%, according to FactSet’s consensus estimates. Core inflation was ...

Market-implied expectations for future inflation were little changed despite a milder-than-expected monthly core reading from December's CPI report on Wednesday — indicating that concerns about the outlook remain.

Asian stocks were mixed Wednesday following Wall Street’s mostly positive performance ahead of key U.S. inflation data that could influence the pace of market-boosting rate cuts by the Federal Reserve.

"Today's cooler-than-expected inflation print is unequivocally good ... near 43,114, according to FactSet. The Nasdaq Composite Index COMP was up 1.9%.

U.S. stocks were surging on Wednesday morning as Treasury yields fell after core inflation data came in below expectations, boosting bets that the Federal Reserve will still be able to cut interest rates this year.

Inflation picked up in December, if economic forecasters are right—driven by rising food and energy costs. And the uptick will almost certainly push the Federal Reserve to rethink any plans for a rate cut in January.

The dollar index was weaker and DHF Capital said persistent inflation could support the currency, with expectations of a hawkish Fed benefiting the dollar, adding that Wednesday’s. inflation data and comments from Fed officials should provide clarity on the 2025 monetary policy outlook.

Exchange-traded funds that hold bonds were rallying on Wednesday morning, following fresh data from the consumer-price index showed the rate of core U.S. inflation slowed slightly last month. The iShares Core U.