U.S. inflation eased in January, adding to evidence that price pressures are cooling — but investors may not get an immediate policy pivot from the Federal Reserve.

## What happened

The Consumer Price Index (CPI) increased **2.4% year over year** in January, down from **2.7%** in December, according to the Bureau of Labor Statistics.

Economists cited broad-based deceleration across several staples (including food and gasoline), while noting certain categories remain elevated — including **electricity** and **home heating**.

## Why it matters for markets

A softer inflation print can support equities by:

- reducing pressure for additional rate hikes,

- improving expectations for eventual cuts,

- lowering discount rates used in valuation.

However, analysts cautioned that policy factors — particularly **tariffs** and **immigration-driven labor supply constraints** — could keep inflation sticky in some areas. That uncertainty may keep the Fed in a **wait-and-see** stance rather than accelerating rate cuts.

## Key details investors are watching

- The report suggests inflation is moving closer to the Fed’s 2% target, but not there yet.

- Gasoline prices were lower on both a monthly and annual basis.

- Some necessities remained well above target, with utility gas service cited as up around 10% annually.

## What to watch next

- Upcoming inflation releases (core CPI and services inflation trends)

- Fed communications on the path of rates

- Policy developments around tariffs, which could re-ignite goods inflation

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Source: CNBC (link below)