January 13, 2026
December inflation holds at 2.7% as DOJ probes Fed chair
Inflation data unchanged as political pressure on Fed Chair intensifies
💰Economy🏛️Government
The Bureau of Labor Statistics released December 2025 inflation data on Jan. 13, 2026. Consumer prices rose 2.7% year-over-year, matching November's rate and economists' expectations. Inflation has stalled above the Federal Reserve's 2% target for over a year despite cooling from its 2023 peak. Coffee prices jumped nearly 20% and beef climbed 16% compared to a year earlier, while egg prices fell 20%. The inflation report came two days after Fed Chair Jerome Powell announced the Justice Department opened a criminal investigation into him. DOJ issued grand jury subpoenas related to Powell's Senate testimony about cost overruns at the Fed's headquarters renovation in Washington, D.C. Powell called it a politically motivated attempt to influence interest rate policy. Trump has publicly demanded rate cuts for months while Powell has kept rates elevated to combat persistent inflation. Powell confirmed in a Sunday night video that DOJ threatened "criminal indictment" but denied wrongdoing. U.S. Attorney Jeanine Pirro, a Trump appointee and former Fox News host, approved the investigation in November. Trump denied involvement in the probe during an NBC interview. The timing alongside the inflation release raises questions about Federal Reserve independence. Some Republican senators including Thom Tillis criticized the investigation as inappropriate.
The Bureau of Labor Statistics released December 2025 Consumer Price Index data on Jan. 13, 2026. Inflation remained at 2.7% year-over-year for both headline and core CPI. The reading matched economists' projections of 2.7% for both measures. Month-over-month, consumer prices increased 0.3% from November to December.
Inflation has stalled above the Federal Reserve's 2% target for over a year. The rate briefly climbed to 3% in September 2025 before easing back to 2.7% in November and December. Price gains were led by shelter and food, which rose 0.4% and 0.7% over the month respectively. Energy prices climbed 0.3% in December.
Coffee prices jumped nearly 20% in November 2025 compared to a year earlier. Beef prices climbed 16% over that same period. But egg prices plummeted 20% in December compared to the previous year. Over 12 months, the energy index increased 2.3% and the food index increased 3.1%.
Fed Chair Jerome Powell announced on Jan. 11, 2026, that the Justice Department launched a criminal investigation into him. DOJ issued grand jury subpoenas related to Powell's Senate testimony last year about renovation cost overruns at the Fed headquarters building in Washington, D.C. The renovation costs ballooned to $2.5 billion, according to reports Trump publicized.
Powell released a video statement Sunday night saying DOJ threatened 'criminal indictment' but he's done nothing wrong. He called the investigation a politically motivated effort to influence the Fed's interest rate policy. U.S. Attorney Jeanine Pirro, a Trump appointee and former Fox News host, approved the investigation in November 2025.
Trump has publicly demanded rate cuts for months, arguing the Fed should lower rates to stimulate the economy. Powell has maintained rates must stay higher to combat persistent inflation above the Fed's 2% target. Trump denied any involvement in the criminal investigation during an NBC News interview. The timing of the DOJ probe two days before the inflation release heightened questions about Federal Reserve independence.
Some Republican senators including Thom Tillis criticized the investigation as inappropriate pressure on the Fed. Former Federal Reserve chairs and Treasury officials also raised alarms about the probe's threat to central bank independence. Pirro defended the investigation Monday night, saying the Fed 'ignored' requests for information about cost overruns and Powell's testimony, 'necessitating the use of legal process.' She wrote that 'no one is above the law.'
💰Economy🏛️Government
People, bills, and sources
Jerome Powell
Federal Reserve Chair
Donald Trump
President of the United States
Scott Bessent
Treasury Secretary
Janet Yellen
Former Treasury Secretary and Fed Chair
Jan Hatzius
Goldman Sachs Chief Economist
Matthew Luzzetti
Deutsche Bank Chief U.S. Economist
What You Can Do
1
understanding
Track monthly CPI reports to understand inflation trends and Fed policy decisions
BLS releases CPI data monthly at 8:30 a.m. EST. Understanding inflation data helps citizens evaluate Fed policy and political claims about the economy.
2
civic action
Contact Senate Banking Committee to demand protection of Fed independence amid DOJ probe
The Banking Committee oversees the Federal Reserve and can investigate whether DOJ's Powell probe threatens Fed independence from political pressure.
Hi, I'm calling about protecting Federal Reserve independence in light of the DOJ investigation and December CPI data.
Key points to mention:
- December CPI at 2.7% supports Powell's position that inflation too high for rate cuts
- DOJ issued criminal subpoenas day before CPI report, raising independence concerns
- Bessent publicly pressuring Fed to cut rates despite inflation above 2% target
- Former Treasury Secretary Yellen warned DOJ probe plus public pressure creates 'pincer movement'
Questions to ask:
- Will the committee hold hearings on threats to Fed independence?
- What is the committee's position on Treasury Secretary publicly pressuring Fed on rate policy?
- Will the committee investigate DOJ's investigation timing?
Specific request: I want hearings on protecting Fed independence and legislation clarifying that Fed officials can't face criminal investigation for rate policy decisions.
Thank you.
3
learning more
Learn about Fed dual mandate and why independent monetary policy matters
Understanding the Fed's price stability and maximum employment mandate helps evaluate whether political pressure for rate cuts serves public interest.