Consumer Price Index showed an acceleration to 2.9%, the highest rate since July. With such high inflation, the Fed is unlikely to cut rates in January.

Annual inflation ticked up for a third straight month in December as food, energy costs rose, CPI report showed. But underlying price measure eased.

The Federal Reserve will hold its first policy meeting of the year on Jan. 28 and 29, where it is widely expected to keep interest rates right where they are after cutting three times since September.

President Donald Trump may want lower interest rates, but the Federal Reserve will almost certainly keep its benchmark interest rate unchanged at its two-day policy meeting that ends Wednesday

Donald Trump’s return to the White House is overshadowing the Fed’s meeting this week, with policymakers expected to pause changes to interest rates for now.

The Fed’s decision on Wednesday is the first following Trump’s return to office, which has been marked by a flurry of executive orders as the US president seeks to impose his agenda on Washington. Analysts say that Fed chair Jay Powell will have to resist White House pressure if he is to retain the confidence of markets and avoid unleashing a new wave of inflation.

As US households have grown frustrated with years of high borrowing costs, President Donald Trump rode into office with a bold pledge to lower interest rates. Last week, he took a dig at the Federal Reserve,

Federal Reserve officials are expected to leave interest rates steady this week, giving themselves more time to lower inflation and to assess how President Donald Trump’s policies will affect the economy.

Faced with a solid economy and mounting inflation concerns, the U.S. central bank has said it will “move cautiously” on cutting interest rates.