In 2024, we all felt the impact of inflation—just in different ways. For some, it showed up at the grocery store. For others, it was in higher travel costs or dining out expenses. That’s bPreview Websiteecause our personal spending habits shaped how we each experienced inflation over the past year.
The chart above highlights just how uneven inflation may have felt, comparing price increases across different categories.
The official Consumer Price Index (CPI) report released in December showed a 12-month inflation rate of 2.7%, aligning with Dow Jones consensus estimates. But as many of us know, averages don’t always tell the full story. When you're paying higher prices at your local market or auto shop, your personal inflation rate may feel much different.
That said, I’d argue the inflation story is mostly positive as we head into 2025. The overall trend is moving lower, which made the Federal Reserve comfortable enough to begin cutting short-term interest rates in 2024. That’s important because it can directly impact everything from credit card and mortgage rates to car loans—meaning less money spent on interest and more money to put toward the things that matter to you.
However, future rate cuts in 2025 will depend on economic data and the trajectory of inflation. While the Fed is signaling a more accommodative stance, they are also balancing inflationary pressures from this administration’s policy initiatives. At their latest meeting on January 29th, the Fed chose to hold rates steady, emphasizing the need for more evidence of sustained price stability before making further adjustments.