US Inflation Remains Sticky Despite Cooler CPI Print

The latest US CPI data is out, and while inflation eases slightly, the trend remains sticky. The headline CPI month-over-month rises 0.2%, better than the consensus of 0.3%, and a reversal from last month’s -0.1%. That’s still inflationary, just not as aggressive as forecasted.

The core CPI month-over-month also prints at 0.2%, softer than the expected 0.3%, but higher than the previous 0.1%. On a year-over-year basis, headline CPI comes in at 2.3%, down from the prior 2.4%, and core CPI stays unchanged at 2.8%.

Shelter is a key driver, increasing from 0.2% to 0.3% and making up a significant portion of the core inflation index. Despite a dip in energy services, overall price pressures remain firm, particularly once food and energy are excluded.

This confirms my view: inflation isn't dropping off. It’s taking one step back, then two forward. Consumer spending stays strong, credit lines remain elevated, and sticky inflation forces the Fed to hold rates higher for longer. The Fed Funds futures now reflect just two 25bps cuts this year — a stark revision from earlier expectations of 125–150bps.

From a trading standpoint, I remain cautious on USD shorts. I prefer USDJPY, USDCHF, and USDSEK longs, given the ongoing risk-on sentiment. With Australia’s improved China trade outlook, AUD and NZD may stay bid, but in a sticky inflation environment, I still see more upside in safe haven shorts and USD strength overall.

Register here for the next webinar: https://acy.com/en/education/webinars/

Join Luca's Telegram Trading Feed: https://t.me/+bkfmaA76P2VlMTQ1

Free Trading eBook Series: https://acy.com/en/education/ebook/

Open a Live or Demo Account here: https://acy.cloud/open-live-account?u...

Catch up with the latest news and market analysis here: https://acy.com/en/market-news

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.