December CPI report: Philadelphia Fed President expects rates to rise “a few more times this year.”

Expectations met.

December’s Consumer Price Index (CPI) report came out yesterday, and here are the key numbers:

• The overall CPI was up 6.5% from a year earlier — the lowest since Oct. 2021.
• Core CPI (excl. food and energy) rose 5.7% from a year earlier — the lowest pace since Dec. 2021.

Compared to the previous month, overall prices had actually decreased by 0.1%.

Where are you placing your bets? The Fed or inflation? At stake are our livelihoods, NBD.

What’s the path for interest rates going forward?

Here’s what the Federal Reserve Bank of Philadelphia President Patrick Harker has to say:

• The central bank should lift rates by 0.25 percentage points moving forward.
• He expects rates will rise “a few more times this year.”

Remember Michael Burry? A few weeks ago, he predicted that inflation would have another spike this cycle.

@RemindMe_OfThis in 1 year

19 days…

Until the Fed meets on Feb. 1 to decide the size of the next interest rate hike.

93.2% expect a 0.25 percentage point hike — bringing the target rate to 4.50-4.75%.

The question is: When will the Fed stop raising rates?

Or the better question is: When will the Fed lower rates?

Markets are still pricing in odds that the Fed will lower rates in 2023 — but the Fed is adamant that’s not the case.