Consumer Price Index: An Encouraging Start to the Year

The January CPI report showed a slight cooling in inflation, with headline CPI at 2.4% YoY. While core prices rose 0.3% in the month, underlying trends in shelter and services remain encouraging for the Fed's long-term outlook.

Key Takeaways

• 1.January CPI inflation slightly beat expectations, with headline and core rates slipping to 2.4% and 2.5% YoY respectively.
• 2.Primary shelter disinflation continues, while volatile items like used cars and airfares provided offsetting effects in the core reading.
• 3.A Federal Reserve rate cut in March is unlikely, but the trend keeps the door open for cuts later in 2026.

Table of Contents

• Summary
• A More Gentle Start to the Year
• Economics Group
• Required Disclosures
• Important Information for Non-U.S. Recipients

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