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U.S. inflation increased by the most in eight months in December amid robust consumer spending on goods and services, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates soon. While the report from the Commerce Department on Friday showed a modest gain in prices excluding the volatile food and energy components on a monthly basis, the annual increase in the so-called core inflation has not slowed since October. The policy statement accompanying the decision did not include the reference to inflation having "made progress" toward the Fed's 2% target.

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“I would like to see progress in lowering inflation resume before we make further adjustments” to the main interest rate, Federal Reserve Governor Michelle Bowman said.

Goolsbee told CNBC, however, that "there is a question mark that is coming from policy uncertainty," including over the impact of tariffs that President Donald Trump says he will impose on trading partners like Mexico and Canada as soon as Saturday. Goolsbee said he agrees with Fed Chair Jerome Powell, who on Wednesday said there should be "no hurry" in making further cuts, given the need to see more progress on inflation. Powell spoke after the central bank announced it had left its benchmark interest rate in the current 4.25%-4.50% range.

WASHINGTON (Reuters) -Federal Reserve Governor Michelle Bowman said on Friday she still expects declining inflation to allow further interest rate cuts this year, but feels rising wages, buoyant financial markets, geopolitical risks, and upcoming administration policies could slow the process and keep price pressures elevated. Bowman's comments did not account for new data on inflation and employment costs released just as her remarks were published.

Wall Street's main indexes rose on Friday, driven by gains in Apple following its strong sales forecast and a reading of the U.S. central bank's favored inflation gauge which aligned with expectations that the Fed would keep borrowing costs steady. U.S. prices increased as expected in December, while consumer spending surged, suggesting that the Federal Reserve has the leeway to delay cutting interest rates for longer this year. Traders kept their bets on the Fed waiting until June to resume rate cuts at 70% after the data was released, futures that settle to the central bank's policy rate indicated.

The Federal Reserve's preferred measure of inflation picked up in December, pushing the central bank's goal of a 2% annual rate farther into the distance.