While the U.S. CPI inflation report on Tuesday showed a slightly softer-than-expected annual increase in core prices, there's little reason for consumers or policymakers to cheer.

Consumer price likely rose 2.7% in the 12 months through December, according to forecasts, as inflation remains well above the Federal Reserve's target.

Follow live coverage and news of the December release consumer price index, scheduled for Tuesday at 8:30 a.m. Eastern time. The inflation data is being watched by the Fed for its interest-rate policy.

Inflation in metro Phoenix fell below the national rate in December as housing costs cooled, but groceries, energy and health care stayed high.

Banks and credit-card stocks dragged the Dow Jones Industrial Average and the S&P 500 lower on Tuesday, while December CPI inflation report showed inflation meeting expectations.

December CPI shows cooling inflation—headline 2.7% and core 2.6%—with muted markets and a likely Fed pause. Click for a full analysis of the latest data.

New CPI report fuels political battle over affordability as Republicans and Democrats clash ahead of midterm elections, with inflation holding at 2.7%.

On the flip side, some foods that have seen their prices go down over that same period include: eggs (-20.9%), potatoes (-3.4%), frozen and refrigerated bakery products (-2.6%), and butter and margarine (-2.2%).