The December Consumer Price Index report was hotter than expected, with prices rising more than expected. The index rose 0.3% month-over-month compared to estimates of 0.2%. On an annual basis, prices rose 3.4% versus expectations of 3.2%.

When food and energy are stripped out, prices rose 0.3% which was in-line with expectations. Core consumer prices rose 3.9% from last year, compared to economists' expectations of 3.8%.

Yahoo Finance's Seana Smith and Brad Smith report on the breaking data.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich

Video Transcript

SEANA SMITH: The CPI print just released for the month of December. And taking a look at these numbers, coming in a bit hotter than expected, at least a month-over-month basis for CPI. The increase there, 3/10 of a percent move to the upside. That was stronger than what the Street was looking for, 2/10 of a percent move to the upside. When you take a look at the core number on a month-over-month basis, coming in line with expectations, 3/10 of a percent rise.

Now, those headline numbers year-over-year comparison, CPI headline number coming in at 3.4%. Again, hotter than what the Street was looking for. The core number also coming in at 1/10 of a percent higher than what the Street had been anticipating, which is coming in at 3.9%. Now, that is down when you compare it to the prior reading that we got on core inflation of 4%. But again, core inflation coming in just a bit hotter than what the Street was anticipating at 3.9%. We're seeing some reaction play out in the futures markets right now, Brad.

BRAD SMITH: Let's take a look at some of the indexes within the index here. Index for shelter, that continued to rise in December, contributed over half of the monthly all items increase there. Energy index, you also saw that rise by about 4/10 of a percent in the month. Increases in electricity index and the gasoline index more than offset a decrease in the natural gas index there. So that some of the kind of larger items here.

But the index for food at home, that increased 1/10 of a percent. And then index for food away from home rose 3/10 of a percent. So all those people who are either cooking at home or perhaps ordering a little Seamless, Grubhub, DoorDash, Caviar, whatever your vice may be, you're contributing to one of those figures one way or another.

And then lastly here, just want to quickly hit the household furnishings and operations index, personal care among those that they actually saw decreases over the month. So we'll dive further into some of these with our reporters that are standing by. But that kind of like the headline takeaway on the indexes within this broader CPI reading.

SEANA SMITH: Yeah. And of course, the big takeaway from this is exactly what this could mean for the Fed. A lot of anticipation going into this print. If we were to get a reading that's slightly hotter than expected, would that then be enough for the Fed to potentially push off any plans of a rate cut, at least in the first half of the year?

Of course, second half of the year, whether or not that would delay any planned cuts and really change the calculus at the Fed in terms of what they anticipate we are going to see in their fight to tame inflation now. Once again, inflation proving to be stickier than many forecasted. Many forecasters had anticipated for this month a similar story to what we have seen play out over the last several months. So exactly how this impacts Fed policy will be the focal point here this morning.