December 2025 CPI rose 2.7% year-over-year, exceeding the Fed's 2% inflation target.

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False. The Federal Reserve's inflation target is 2%, not 2.7%. December 2025's 2.7% rate means inflation remains 0.7 percentage points above the Fed's goal. The Fed has maintained this 2% target since 2012 as part of its dual mandate of price stability and maximum employment. Inflation has exceeded this target for 14 consecutive months, fluctuating between 2.3% and 3.0% since December 2024. This persistent elevation explains why Fed Chair Jerome Powell refuses to cut interest rates despite presidential pressure—cutting rates with inflation at 2.7% risks reigniting price increases.

December 2025 CPI rose 2.7% year-over-year, exceeding the Fed's 2% inflation target.

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