CPI rose 0.3% MoM in December. CPI YoY, the headline number, was 1.5% higher and leaves the "core" (ex food & energy) up 1.7%. The headline rise reflected a modest gain in food (0.1% m/m) as well as a stronger increase in energy (2.1% m/m). Despite the December rise, however, the energy component stands just 0.5% higher y/y. Within the core, gains in the heavily weighted services components, such as rent (0.3% m/m) and Owners' Equivalent Rent (0.2%), continued. Weakness in the core commodities component, which has fallen 0.1% on a y/y basis, has been a major reason that steady core services inflation has not yet passed through to a stronger headline reading.
There just isn't a whole lot of inlfationary pressure for the Fed to worry about just yet.