New inflation report may clarify year-end price trends

The final 2025 inflation report will be released Tuesday; economists expect a 0.3% monthly increase and a 2.7% annual rate.

The final inflation report for 2025 will be released Tuesday and is expected to close the year’s data. Economists project a 0.3% rise from November to December and a 2.7% annual rate. A two-month mid-December report showed a 0.2% increase for October and November and analysts say December could be stronger. Some firms have highlighted rising food-at-home costs as one factor pushing prices higher. Key facts: - Report timing and expectations: the report is due Tuesday, with economists forecasting a 0.3% month-to-month increase and a 2.7% year-over-year rate. - Core and food details: UBS expects core inflation to rise about 0.44% and notes notable increases in food-at-home items such as eggs, ham and fresh fruit. - Measurement distortions noted: Citigroup and JPMorgan said the long government shutdown and the timing of late-November holiday sales likely pushed earlier monthly readings down, and December could correct those biases. - Policy context: the Justice Department announced a criminal investigation of the Federal Reserve, and the Fed’s next policy decision later this month is widely expected to hold interest rates steady. Summary: If the report matches expectations, December would show a stronger monthly increase and leave the annual rate near recent levels. The immediate next steps are the publication of Tuesday’s inflation data and the Federal Reserve’s policy decision later this month; further implications are undetermined at this time.