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.

Inflation is proving stickier than expected, which could cause Fed to hit pause button on more interest rate cuts.

Federal Reserve Bank of Richmond President Tom Barkin said fresh inflation data show the central bank continues to see progress on lowering inflation toward its 2% goal, but that interest rates should remain restrictive.

U.S. consumer prices increased slightly more than expected in November as energy costs rose, pointing to an inflation trend that lines up with the Federal Reserve's view for a slower path of rate cuts this year.

Figures from December show core inflation tamer than expected, but "there's still work to do" amid broader uncertainty.

The Bureau of Labor Statistics is set to release the consumer price index report for December at 8:30 a.m. Eastern time on Wednesday. What the inflation data will mean for the Fed and interest rates.

The closely scrutinized monthly consumer-price index is due at 8:30 a.m. ET. Here are some key points to know ahead of the report: Economists expect annual inflation to come in at 2.9% as of December,