Two important measures of inflation hit the wires last week. Both the Consumer Price Index (CPI) and the Producer Price Index (PPI) indicator show inflation in a downtrend.

PPI tracks price changes at the wholesale level. It advanced 0.2% in December versus 0.4% in November. Year-over-year, PPI jumped 3.3% from a previous reading of 3.0%. Energy costs for December were down 2.5% year-over-year.

The Consumer Price Index (CPI) shows that U.S. consumer prices rose in December, but lower than forecast. CPI increased 0.2%, after rising 0.3% over four consecutive months. Year-over-year CPI rose 3.2% percent.

In addition to the Personal Consumption Index, GDP, housing starts, and ten-year treasuries, CPI and PPI are considered key considerations for the Federal Reserve as it weighs interest rates. Reuters reports that it is even money for two rates cuts in 2025.