By Howard Schneider, Michael S. Derby ANNAPOLIS, Maryland (Reuters) -Federal Reserve officials said data released on Wednesday showed U.S. inflation was continuing to ease even as they noted heightened uncertainty in the coming months as they await a first glimpse of the incoming Trump administration's policies.

President-elect Donald Trump will re-enter the White House next week against a more challenging economic backdrop than when he was sworn in for the first time in 2017 — starting with the threat of inflation.

The U.S. economy ended 2024 with a slight to moderate increase in activity and a tick upward in employment, the Federal Reserve said on Wednesday, but businesses flagged a range of concerns about the potential for policies under President-elect Donald Trump to push prices higher.

President-elect Donald Trump is set to inherit inflation at a 5-month high. According to the Labor Department, consumer prices rose 2.9% year-over-year and 0.4% month-over-month in December, the largest gains in overall prices in months.

Donald Trump's policies are not likely to cause inflation to reignite as many analysts fear, one of the president-elect's longtime economic advisors told AFP Tuesday, less than a week before