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An inflation gauge closely watched by the Federal Reserve rose slightly last month, while some underlying prices pressures showed signs of easing. The latest inflation figures arrive as President Donald Trump has threatened to impose big import taxes on goods from Canada and Mexico, potentially affecting everything from autos to avocados, which could push prices higher in the coming months. Friday’s report from the Commerce Department showed that consumer prices rose 2.6% in December from a year earlier, up from a 2.4% annual pace in November and the third straight increase.

LONDON (Reuters) -Oil prices were steady on Friday but on course for weekly declines as markets waited to see if U.S. President Donald Trump will follow through on his threat to impose tariffs on Mexico and Canada on Saturday. Brent crude futures for March, which expire on Friday, were down 9 cents at $76.78 a barrel by 1420 GMT. Oil came under pressure from the potential negative economic impact of U.S. tariffs against Canada, Mexico and China, said PVM analyst Tamas Varga, adding that potential dollar appreciation as a result of tariffs also weighed on oil.

The personal consumption expenditures (PCE) price index rose 0.3% last month after an unrevised 0.1% gain in November, the Commerce Department said on Friday. Economists polled by Reuters had forecast the PCE price index climbing 0.3%. In the 12 months through December, the PCE price index advanced 2.6% after rising 2.4% in November.

(Bloomberg) -- The Federal Reserve’s preferred measure of underlying inflation remained muted in December and real incomes were soft, which should support further reductions in interest rates this year.Most Read from BloombergHow the 2025 Catholic Jubilee Is Reshaping RomeTrump Paves the Way to Deputize Local Police on ImmigrationManhattan’s Morning Commute Time Drops With New Congestion TollHistoric London Elevator Faces Last Stop in Labour’s Housing PushHousing Aid Uncertain After Trump’s Spen

The latest reading on the Fed's preferred inflation gauge comes just two days after the central bank paused its interest rate-cutting cycle.

(Bloomberg) -- Federal Reserve Governor Michelle Bowman said she wants to see additional progress on inflation before the central bank lowers interest rates further, and questioned how restrictive policy might be given the economy’s strength.Most Read from BloombergHow the 2025 Catholic Jubilee Is Reshaping RomeTrump Paves the Way to Deputize Local Police on ImmigrationManhattan’s Morning Commute Time Drops With New Congestion TollHistoric London Elevator Faces Last Stop in Labour’s Housing Push

After the inflation report, released at the same time as hawkish monetary policy remarks from Fed Governor Michelle Bowman, traders of futures that settle to the Fed's policy rate priced in about a 70% chance that the short-term borrowing rate will be 4.25% or lower after the Fed's June meeting, little changed from earlier in the day. They were pricing in a second and final 2025 interest rate cut no sooner than October.