Inflation is stubbornly steady
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Inflation, still high, but not worse. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. The Bureau of Labor Statistics has just released the final inflation reading for 2025, the Consumer Price Index for December. Spoiler alert, it is still too high. Prices were up 2.7% from the year before, but that was the same as it was in November. Between November and December, prices went up three-tenths of a percent. Let's get into it with Jeffrey Cleveland, chief economist at Payden & Regal. Hi, Jeffrey. Hi, Jeffrey. Good morning.
What are the latest inflation statistics for December 2025?
So what are your first impressions of this number? 2.7% year over year, three tenths of a percent month to month. What do you think?
The good news, especially for those folks on Wall Street at least, is that the much-watched core CPI, so it excludes food and energy, was a bit softer than expected. It was up 0.2% on the month, and it's up 2.6% year-on-year, which is a little softer than expected. I think that's what markets are reacting to this morning.
Yeah. Why are they mildly pleased about this?
I think that keeps the dream alive, Sabri, for rate cuts. The Federal Reserve, the central bank is waiting for inflation to continue to moderate. There were some fears that inflation would be a little bit hotter in December after a pretty soft November report. So the fact that it came in softer than expected is overall good news.
What are some of the things that are getting more expensive faster than everything else? And is there anything that actually got cheaper?
Well, food in general was up quite sharply. The food index was up 0.7 in December. Food at home, which I tend to do a lot of food at home myself, that was up 0.7% in December. That's a big rise in the index. And food away from home was up as well. So food, I think, is one area for the average person listening to this They're not going to be comforted by core CPI being softer. They're going to look at food and say, hey, no, this is a problem.
Jeffrey Cleveland, chief economist at Payden and Regal, thank you so much. Have a wonderful week. Fourth quarter earnings season gets underway this week. This is where companies report back on how they did in the last quarter and what they see ahead. Kicking it off are some major banks. JPMorgan Chase reported its net income for the year was $57 billion, second best year ever. Tomorrow, it's Bank of America, Wells Fargo and Citigroup. And one thing bank CEOs are sure to be asked about on their earnings calls is President Trump's call to cap credit card interest rates at 10 percent.
How does the core CPI impact market reactions?
That would be about half what they are now. Marketplace's Nova Sappho has more on the pros and cons.
Analysts don't know what legal authority, if any, President Trump can use to compel banks to cap rates at 10 percent. But they do think there will be negative consequences for consumers. Ted Rossman is with Bankrate.
The problem is that it just wouldn't be profitable for banks, and they would cut back on lending dramatically.
That's because credit card debt is inherently risky. It's not secured to an asset like a house or a car.
One of the big reasons why credit card rates are 3 or 4 or 5x higher than a lot of other financial products is it's unsecured debt.
Some people don't pay it back. The trade group Electronic Payments Coalition says Trump's demand could leave anyone with a credit score below 740 effectively without credit card access. Consumer spending could slow and hurt the economy.
We often hear the access to credit argument.
Lauren Saunders is with the National Consumer Law Center.
The credit card companies make billions of dollars in profits off of credit cards, and they certainly have room to charge lower rates than they do today.
How much room? Ted Rossman of Bankrate says maybe one or two percentage points lower than current rates, but banks won't go as low as 10%. I'm Novosafo for Marketplace.
And a federal judge has struck down the Trump administration's suspension of an offshore wind project off the coast of Rhode Island. The administration had argued the turbines, which were almost completely installed, posed a national security risk.
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