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US inflation rises to 3.4% in December

US headline inflation tops forecasts, lifted by higher housing costs, although core inflation broadly met expectations.

11 January 2024

The US December report was ahead of forecasts of a 3.2% number, showing a 3.4% year-on-year growth rate, rising 0.3% in the month. However, core CPI year-on-year came in much in line with expectations of 3.9%.

Normally this kind of inflation “burp” would not be welcomed by markets that still, on balance, expect a rate cut in March from the Federal Reserve (Fed), but it is seemingly being taken as a case of mild indigestion in the slowing rate of inflation, rather than a full-on case of acid reflux and inflation going higher again in a second wave. But it will mean that the inflation hawks will still dominate the Fed’s narrative for the moment, especially so if PPI data on Friday is pointing in a similar shorter-term upward direction.

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Charles Hepworth

Investment Director
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