U.S. inflation ticked higher in December, data indicated Wednesday, but core price price pressures eased, potentially sparking a relief rally in stocks tied to renewed bets on Federal Reserve interest rate cuts.

Federal Reserve policymakers may be able to reduce interest rates a couple of times this year, traders bet on Wednesday, after a government report helped allay fears that inflation was accelerating in the final full month of Joe Biden's presidency.

Treasuries rallied as inflation last month eased in the US by slightly more than economist had predicted, reinvigorating some bets that the Federal Reserve will lower interest rates further this year.