Here Comes Inflation ...

REUTERS/Mark BlinchAn inflatable Santa Claus decoration.

Here comes inflation. Or, well, probably deflation.

The December consumer price index report is set for release from the BLS at 8:30 am ET, and expectations are for this report to show consumer prices fell 0.4% month-on-month in December, the biggest drop since December 2008.

On a year-on-year basis, prices are expected to rise just 0.7% in December. The decline in December and just modest gain over last year is largely due to the declining price of gas.

"Core" inflation, which strips out food and energy prices, which tend to be more volatile, is expected to edge up 0.1% over last month and rise 1.7% when compared to the prior year.

Inflation has been running below the Federal Reserve's 2% target for some time now, and Friday's report is unlikely to change the Fed's progress towards that goal.

We'll be back with the live numbers when they hit.