U.S. consumer prices rose 0.3% in December, in line with market expectations, as energy prices rose for the first time in three months. The year-over-year rate rose, albeit to a still subdued 1.5% from 1.2% in November.
Excluding food and energy components, core Consumer Price Index inched up 0.1% following similarly modest 0.2% and 0.1% hikes in November and October, respectively. The year-over-year rate held steady at 1.7% for a fourth straight month.
To quote experts at RBC Economics: "We expect the economic backdrop will continue to improve in 2014 at a rate that will be sufficient to prompt the Federal Reserve to fully wind down its asset purchase program by the end of this year; however, the lack of inflation pressures will continue to provide the Fed with flexibility to maintain a highly stimulative policy stance to encourage further and faster improvement in labour markets."
