Analysis: January CPI Expected to Continue Cooling Trend, Fed Likely to Remain on Hold in the Short Term

BlockBeats News, February 13: The U.S. Bureau of Labor Statistics will release the January CPI data on Friday night, Beijing time at 21:30. The market expects the overall CPI in January to increase by 2.5% year-on-year, lower than the previous value of 2.7%; the core CPI is also expected to fall to 2.5% year-on-year, with a month-on-month growth rate possibly rising to 0.3%. If the data meets expectations, overall inflation will decline to its lowest level since May 2025, continuing the trend of decline from the peak in September last year.

Analysts pointed out that the slowdown in housing cost growth may suppress service prices, but tariff pass-through, initial price increases by companies at the beginning of the year, and prices of travel-related sub-items may still support inflation. RBC expects the core CPI to increase by 0.4% month-on-month, higher than the market's expectations.

Although inflation data may further cool down, the market generally believes that it is difficult to shake the Federal Reserve's current "wait-and-see" stance. CME Group tools show that the probability of the Fed keeping interest rates unchanged at least until July is relatively high. Economists point out that against the backdrop of fiscal expansion and the previous three interest rate cuts, decision-makers are more concerned about the sustainability of the inflation decline and the performance of the job market.

The current target range for the federal funds rate is 3.5%-3.75%. Some institutions believe that even if inflation falls to 2.5%, it still falls within the "normal range," but the policy path may not undergo significant adjustments in the short term due to single-month data.