Markets cheered a December inflation report that suggested underlying price pressures are easing, but the Federal Reserve still isn’t likely to cut interest rates anytime soon given President-elect Donald Trump’s plans for the economy.

The Labor Department's inflation report for the month of December showed that food and energy prices were the primary drivers of stubborn inflation experienced by consumers.

Inflation probably picked up in late 2024, fueled by robust household spending amid a strong economy. A key gauge of inflation — the consumer price index — is expected to show Wednesday morning that prices rose by 2.9 percent in December from a year earlier, according to economists’ forecasts of data released by the Bureau of Labor Statistics.

Excluding the volatile food and energy categories, so-called core inflation declined to 3.2%, after remaining stuck at 3.3% for three months in a row.