Stocks rallied on Wednesday after the December CPI print eventually showed some easing of underlying inflation and investors calibrated bets on Fed rate cuts.

But the threat of sticky prices still looms ahead a regime change in Washington when President-elect Donald Trump takes office next week. And economists largely agree that the fight to curb inflation is far from over.

“Inflation has not been consistent,” Claudia Sahm, chief economist at New Century Advisors and a former Federal Reserve economist, told Yahoo Finance. morning brief program “It’s been pretty uneven.”

Although inflation has slowed, it has remained above The Federal Reserve’s 2% target on an annual basis. Higher costs for shelter and basic services like health care and insurance have contributed to stubborn readings in recent months, with consumers simultaneously feeling the pinch in grocery stores i also at the pump.

“I don’t think we’re completely out of the woods here,” Ed Yardeni, president of Yardeni Research, told Yahoo Finance. Overtime market dominance. “We must remember that at the end of 2023, there were deflationary tendencies. And then we got into 2024 and we saw a little bit of that change.”

Rising wages and strong job market have somewhat offset recent price pressures, but the underlying trends have shown continuity in the categories most households rely on. That does the Fed’s job even harder to achieve.

“It’s a bit of a breather to get some bad ‘no no’ news,” Sahm said, referring to the December slowdown in monthly core inflation and core prices. But “it’s not really a game changer. It’s a lot more than we’ve seen with month-to-month volatility mixed in.”

And volatility is likely to pick up with Trump taking office on Monday.

Trump’s proposed policies, such as high tariffs on imported goods, corporate tax cuts and immigration restrictions, are considered inflationary. And these policies could make it even more complicated the central bank’s path forward for interest rates.

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