The inflation fight faces a 'difficult' last mile

foxbusiness.com:

Hennion & Walsh Asset Management President and CIO Kevin Mahn discusses the state of the Fed's inflation fight after consumer prices rose more than expected in December on 'The Big Money Show.'

Inflation has fallen considerably from the highs of 2022, but the last mile to price stability may be the most challenging.

The Labor Department reported last week that the consumer price index re-accelerated in December amid a spike in energy and shelter costs, underscoring the challenge of taming price pressures within the economy.

The data showed that inflation rose 0.3% in December from the previous month and remains up 3.4% from the same time last year. Both of those figures came in higher than economists surveyed by Refinitiv expected. 

«While inflation will continue to ease, we have made the case that the endgame in the Fed’s efforts will not necessarily result in a 2% rate over the long term,» said Joe Brusuelas, RSM chief economist. «The evolution of the data illustrates just how difficult the last mile will be.»

FED'S FIGHT AGAINST INFLATION IS WEIGHING ON MIDDLE-CLASS AMERICANS

Customers shop at a supermarket in Foster City, California, on Sept. 13, 2023.  (Photo by Li Jianguo/Xinhua via Getty Images / Getty Images)

Other parts of the report also indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.3%, or 3.9% annually. Both of those figures are slightly higher than estimates; however, it marked the first time since May 2021 that core inflation fell below 4%.

Inflation is down sharply from June 2022, when it hit a peak of 9.1%, but prices remain well above the Federal Reserve's 2% goal. And when compared with January 2021, shortly