December CPI Reinforces a Choppy Downtrend in 2026 Inflation

- U.S. December CPI rose 2.7% YoY, with core CPI at 2.6%, below forecasts, driven by energy-intensive services and falling travel costs.

- Rent inflation slowed to 2.9% YoY (lowest since 2021), while real wage growth remained positive for 2.5 years, outpacing price increases.

- Fed unlikely to cut rates in January as inflation remains volatile; experts highlight risks from Trump's tax cuts and AI-driven corporate spending.

- Tariff-affected goods show declining prices, but early 2025 price resets and political scrutiny of Powell could delay rate cuts.