The headline rate of inflation in the U.S. fell to its lowest level since late 2021 in December, prompting the Fed to soon halt its rapid interest rate hikes.
Official data showed the consumer price index fell 0.1% from November bringing the annual change to 6.5%, down from 7.1% the previous month. The monthly decline in the CPI was in line with the expectations of some analysts including the annual rate.
Inflation dynamics still look stronger when volatile elements such as food, energy and car sales do not have a significant impact. The 'core' CPI rose 0.3% last month, up slightly from November and making the annual core rate rise 5.7%.
Stock market futures fell after December's consumer price report was in line with fading inflation expectations. Futures linked to the Dow Jones Industrial Average gained 102 points, or 0.1%. S&P 500 futures added 0.1%, while Nasdaq-100 futures slipped 0.1%.
On the other hand, the S&P 500 rose 4% and the Nasdaq Composite 6% higher in the last five trading days as investors bet the CPI report will confirm the slowing inflation trend.
The US dollar index, which measures the greenback's strength against six major currencies, traded down 0.50% to trade at 102.350 after the CPI report was released.
