According to the latest consumer price index report released by the U.S. Department of Commerce, the year-on-year inflation rate in December was 2.7%, remaining the same as in November; the month-on-month inflation rate rose from 0.1% to 0.3%. The core inflation rate, excluding food and energy prices, increased by 0.2% on a month-on-month basis, which is below expectations. Overall, this inflation report is relatively mild, indicating that American consumers may gain some limited space to ease the pressure of prices, while also giving Trump some more room to maneuver in his government's efforts to address the "affordability" issue. However, at the same time, the latest data shows that electricity, gas, dining out costs, and some food prices have still risen significantly compared to a year ago, which is an important reason for many voters' price shocks.

In recent weeks, White House officials have been urgently seeking ways to cope with rising housing costs, weighing various measures to increase housing construction, reduce some mortgage costs, alleviate property tax burdens, and allow families to use education savings and retirement funds as down payments. However, White House assistants have gradually realized that many proposals are either too complex or require congressional approval. Moreover, not everyone within the government agrees on making a full effort in this area, with some people believing it is mainly a "blue state" issue.

This inflation report is certainly crucial for the Federal Reserve policymakers, as a campaign is currently underway globally to protect Federal Reserve Chair Powell from federal criminal investigation. Central bank governors from around the world have issued an unprecedented joint statement expressing full support for Powell and opposing any actions that weaken the independence of the Fed. In Wall Street, several banking leaders, including JPMorgan CEO Jamie Dimon, have spoken out against any actions that erode the independence of the Fed. At the same time, Trump continues to put pressure on Powell. He told reporters on Tuesday morning about Powell, saying: "He is either incompetent or corrupt."

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