Inflation cooled down a bit more in December, which is a pretty big relief. The latest CPI report shows that "core" inflation (the stuff that strips out food and energy) is actually rising at its slowest yearly pace since March 2021.
Even though the overall headline inflation rate stayed flat at **2.7%** compared to November, it’s still down from the **3%** we were seeing back in September. This is a good sign that things are finally moving in the right direction after a few months where prices felt stuck.
The big question now is how the Fed will react. Jerome Powell has mentioned that the data might be a little messy because of the recent government shutdown, but the stock market seems to like the news so far. Basically, it looks like a solid, optimistic start to 2026.