WE’LL KNOW SOON ENOUGH: Thursday’s inflation report could challenge the market outlook for big Fed rate cuts.

Economists expect that inflation nudged higher in December, a trend that could call into question the market’s eager anticipation that the Federal Reserve will slash interest rates this year.

The consumer price index, a widely followed measure of the costs folks pay for a wide range of goods and services, is projected to have risen 0.2% in the final month of 2023, or 3.2% for the full year, according to Dow Jones.

At a time when the Fed is fighting inflation through tight monetary policy including elevated rates, news that prices are holding at high levels could be enough to disrupt already-fragile markets.

Markets that depended on low-to-zero interest rates to generate returns were never that robust to begin with.