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US Inflation Details Offer Room for Deeper Fed Rate Cuts

U.S. consumer price inflation in January eased to 0.2% month‑on‑month, with core CPI matching expectations at 0.3% and both headline and core year‑on‑year rates falling to four‑year lows of 2.4% and 2.5%. Goods prices excluding food and energy were flat, suggesting tariffs are not driving inflation, though import prices remain elevated. Airline fares surged 6.5% MoM, creating a potential hot spot for the Fed’s preferred core PCE measure. Markets now price 63 basis points of Fed cuts, and analysts anticipate two reductions in June and September.