A measure of wholesale prices rose less than expected in December, suggesting inflation pressures in the year-end pipeline have eased, although probably not enough to trigger another rate cut from the Federal Reserve any time soon.

According to a report from the Bureau of Labor Statistics on Tuesday, the producer price index rose just 0.2% month-over-month, less than November’s 0.4% increase and below the Dow Jones consensus estimate of 0.4%.

Excluding food and energy, the so-called core PPI was unchanged, compared with forecast for a 0.3% increase. Excluding food, energy and trading services, the value rose by just 0.1%.

On an annual basis, overall PPI rose 3.3% for the full year, well above the 1.1% increase in 2023.

Goods prices rose 0.6%, driven by a 9.7% rise in gasoline prices. Upwards in several nutrition and energy measures were offset by a 14.7% decrease in prices for fresh and dry vegetables.

On the services side, prices remained unchanged, despite a 7.2% increase in passenger transport, offset by a decrease in prices for accommodation for travelers.

Stock market futures jumped after the report, while Treasury yields fell after rising sharply at the start of 2025.

The release is the first of two key inflation readings this week that will likely factor into the Federal Reserve’s interest rate decision later in January.

On Wednesday, the BLS will release its closely watched consumer price index numbers. The headline and core stocks are expected to show a monthly increase of 0.3% and an annual inflation rate of 2.9% and 3.3%, respectively.

Although the central bank focuses more on the Commerce Department’s Personal Consumption Expenditure Price Index as the main indicator of inflation, PPI and CPI values ​​are also included in this calculation.

Market prices overwhelmingly suggest the Fed remains on hold at the January 28-29 meeting. However, policymakers, and in particular Chairman Jerome Powell, could be laying the groundwork for the interest rates that lie ahead.

Fed fund futures pricing on Tuesday suggested only a single rate cut for the rest of the year; Economists at Bank of America said Monday they believe the Fed could be ready this year. Fed officials at their December meeting budgeted the equivalent of two rate cuts this year, estimating moves of a quarter of a percentage point.