December's inflation numbers landed exactly where they were in November: 2.7% year-over-year. Markets shrugged and basically said "good enough," but it's still too hot for the Federal Reserve to justify slashing rates anytime soon. Now, as political voices grow louder demanding cheaper borrowing costs, prominent strategist Charlie Bilello is drawing a line in the sand, calling outside pressure on the central bank what it really is: price fixing.

The Inflation Picture: Not Bad, Not Great

The Consumer Price Index showed prices holding steady at that 2.7% annual increase. There was a silver lining buried in the data—core services inflation excluding housing, which economists lovingly call "super core," cooled to 2.76% from earlier highs. But the monthly pace still runs warmer than the Fed would like.

Jeffrey Roach, Chief Economist for LPL Financial, expects the central bank to sit tight this month. He sees conditions potentially justifying a rate cut by April, especially as economic risks start tilting toward a weakening jobs market. Eric Teal, Chief Investment Officer at Comerica Wealth Management, thinks inflation will bounce around between 2.2% and 2.7% for the foreseeable future.

Why Bilello Is Defending the Fed's Pause

The data essentially locks in what markets already expected: the Fed will leave interest rates alone at its January 28 meeting. Bilello, Chief Market Strategist at Creative Planning, says that's the "right decision," even if it makes people angry.

Here's where it gets interesting. As political pressure builds for the Fed to lower rates and juice the economy, Bilello argues that interest rates should be determined by market forces—supply and demand—not by whoever occupies the White House.

The Price Fixing Problem

Bilello's warning is sharp and direct. When politicians rather than market dynamics set interest rates, you're looking at price controls. And price controls, he argues, lead to misallocated capital, asset bubbles, and the kind of wild boom-bust cycles that wreck economies.

"There's going to be a lot of people complaining in 2 weeks when the Fed doesn't cut rates. Let them," Bilello wrote. "Price controls don't work—whether it's rent, oil, or interest rates."

What Markets Are Expecting

The CME Group's FedWatch tool shows markets pricing in a 97.2% probability that rates stay put in January. That's about as close to certain as markets get.

On Tuesday, major market trackers retreated slightly. The SPDR S&P 500 ETF Trust (SPY) dropped 0.20% to $693.77, while the Invesco QQQ Trust ETF (QQQ) slipped 0.15% to $626.24. Futures for the S&P 500, Nasdaq 100, and Dow Jones indices were trading lower on Wednesday.