US inflation held firm in December amid pressure on Trump over cost of living

Core Insights - US inflation remains steady with the consumer price index (CPI) rising 2.7% year-over-year as of December, consistent with the previous month and above the Federal Reserve's 2% target [1][2] - The CPI increased by 0.3% month-to-month, while the core index, excluding food and energy, rose by 0.2%, attributed to the unwinding of distortions from the longest US government shutdown rather than strong economic momentum [3] Economic Context - Food and housing costs were significant contributors to the CPI increase in December [2] - Inflation peaked at a 40-year high of 9.1% in June 2022, influenced by global economic disruptions from the Covid pandemic [4] Political Implications - Public sentiment is shifting blame for rising costs onto the Trump administration, with a Harris Poll indicating that twice as many Americans feel their financial security is worsening [5] - The Trump administration has claimed that prices are falling and attributed lingering inflation to the previous Biden administration [4] Government Response - The president is set to address economic concerns in a speech in Detroit, announcing measures such as capping credit card interest rates and banning large institutional investors from purchasing single-family homes [6] - Elizabeth Warren criticized the Trump administration for increasing costs for families, highlighting that inflation remains higher than when the trade war began [8] Federal Reserve Dynamics - The Federal Reserve is facing scrutiny and pressure from the Trump administration regarding its interest rate policies, with the central bank having cut rates three times last year but resisting deeper cuts [8] - Recent developments include the Department of Justice serving the Fed with grand jury subpoenas, raising concerns about the independence of the central bank [9]