MNI BRIEF: US Jan Core CPI Cools To 0.3%, Softer Than Expected

U.S. January CPI and core CPI rose just 0.171% and 0.295%, respectively, both a tenth below Wall Street expectations, adding to the case for the Federal Reserve keeping interest rates where they are for the time being. The Bureau of Labor Statistics reported the 12-month headline measure down a tenth to 2.4% and core CPI steady at 2.5%. 

Shelter, the largest factor in the headline price increase, pulled back to a 0.2% increase from 0.4% in December, the BLS said. Airfares, personal care, recreation, medical care and communication rose in the month and used cars and trucks, household furnishings and operations and motor vehicle insurance decreased. 

The January report was seen by traders and Fed officials as an important test of tariff-related pressures and annual early-year price resets, with many expecting a larger acceleration in core prices. Traders continue to price in a cut by July and two by year-end after the report. (See: MNI INTERVIEW: US Labor Market 'On Pause' Amid AI Uncertainty)