Analysis: January CPI is expected to continue the cooling trend, and the Federal Reserve may remain on hold in the short term.

BlockBeats News, on February 13th, the U.S. Bureau of Labor Statistics will release the January CPI data at 21:30 Beijing time on Friday. Market expectations are that the overall CPI for January will increase by 2.5% year-over-year, lower than the previous 2.7%; core CPI is also expected to fall back to 2.5% year-over-year, with month-over-month growth possibly rising to 0.3%. If the data meets expectations, overall inflation will drop to its lowest level since May 2025, continuing the downward trend from the high point in September last year.

Analysts point out that the slowdown in housing cost increases may suppress service prices, but tariff transmission, early-year price hikes by companies, and travel-related subcategories may still support inflation. RBC predicts that core CPI could increase by 0.4% month-over-month, exceeding market expectations.

Although inflation data may further cool down, the market generally believes it will be difficult to shake the Federal Reserve’s current “wait-and-see” stance. CME tools show a higher probability that the Federal Reserve will keep interest rates unchanged at least until July. Economists note that, against the backdrop of fiscal expansion and three previous rate cuts, policymakers are more focused on the sustainability of inflation decline and employment market performance.

The current federal funds rate target range is 3.5% to 3.75%. Some institutions believe that even if inflation falls to 2.5%, it still falls within the “normal range,” but in the short term, policy paths are unlikely to change significantly based on single-month data.

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