According to the latest consumer price index report, inflation rose again in December, largely due to a rise in energy prices. Anyone waiting for relief from high interest rates will have to wait a little longer.

The report showed that prices rose 2.9% annually in December, as most experts expected. Core inflation, which excludes the food and energy categories, rose 3.2% year-on-year, slightly less than expected.

A sharp rise in energy prices, which had been declining for much of 2024, accounted for 40% of the rise in inflation, the Bureau of Labor Statistics said in its report. The gas index rose 4.4% month-on-month, compared with a 0.6% rise in November. The price of piped gas also rose by 2.4% over the month.

What this means for this month’s Fed meeting

The Federal Reserve meets at the end of the month and experts expect the central bank to keep interest rates stable. With inflation picking up again in the latest quarter and the labor market remaining strong – unemployment fell back to 4.1% in December, according to the latest jobs report – it is becoming increasingly unlikely that the Fed will cut interest rates any time soon .

Economist Robert Fry says he doesn’t expect the Fed to cut rates again before the end of this year.

“I think the Fed needs at least a month, probably several, for the core PCE price index to rise less than 0.2% to justify a rate cut,” he said in an email.

How to combat high energy prices for private households

Several factors contributed to the rise in energy prices in December, including freezing temperatures across much of the country and ongoing geopolitical unrest. If you notice your electric bill skyrocketing due to the recent cold spell, there are steps you can take to combat rising prices, including the following:

• Set your thermostat to a lower temperature and lower it a few more degrees when you go to bed. You can Use a smart thermostat This will help you create a schedule so you don’t have to remember to adjust the temperature every night.
• Use weatherstripping to seal drafty windows and cracks on your doors.
• Use a Space heater to heat only the rooms you use. Just make sure you Connect it directly to the wall.

While these changes may not completely offset price spikes, they could help reduce your monthly costs.

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