#CPIWatch
đ U.S. Inflation Slows â Fresh Data & Market Reaction
Inflation is cooling đ â is this the real turning point for markets?
âš U.S. inflation is cooling more than expected â offering a fresh breath of relief for markets and consumers alike. The latest Consumer Price Index (CPI) data shows a year-over-year rise of just 2.7% â noticeably below economist forecasts of ~3.1% and a clear slowdown from earlier in 2025. Thatâs the softest pace in years, signaling that price pressures may finally be abating.
đ„ Core inflation, which strips out volatile food and energy costs, also surprised on the low side at 2.6%, suggesting underlying pressures are easing across many service and goods categories.
đ Market Reaction:
âą Stocks climbed as traders priced in a greater chance of Fed rate cuts next year â with sentiment turning more dovish.
âą Bond yields eased and the U.S. dollar softened, reflecting growing optimism about future borrowing costs.
âą Crypto markets rallied modestly on the surprise reading, with traders eyeing lower rates as a catalyst for risk assets.
âïž But economists urge caution â data collection was disrupted earlier in the fall due to a government shutdown, which means some price measures may be less reliable than usual. Analysts are watching Decemberâs release for confirmation of the disinflation trend.
Inflation is trending down â and markets are responding well â but economists want more consistent data before declaring victory.
đCooling inflation is progress, not proof â trust the trend, not a single number.