US inflation cools in January 2026: Market implications

U.S. inflation cooled in January 2026, with CPI up 0.2% monthly and 2.4% annually. Core inflation rose 0.3% monthly and 2.5% annually. The Fed is expected to remain cautious.

U.S. inflation continued to ease in January 2026, as the Consumer Price Index (CPI) rose 0.2% from December and 2.4% year over year, both slightly below market expectations. Core CPI, which excludes volatile food and energy prices, increased by 0.3% monthly and 2.5% annually. These figures reflect a sustained disinflationary trend, with both headline and core inflation rates reaching their lowest levels since mid-2021. Price declines in gas, used cars, and medical care contributed to the moderation, though food prices remained elevated. The Federal Reserve is expected to maintain a cautious stance, closely monitoring core and supercore inflation before considering any interest rate changes. The cooling inflation data initially triggered volatility in Bitcoin’s price, and further market reactions are anticipated as the Federal Reserve assesses its next policy steps.