The US Bureau of Labor Statistics released monthly inflation data this morning, showing that price growth is slowing: January 2026 data indicated a monthly increase of +0.2% and +2.4% over the past 12 months.
Core CPI, excluding energy and food, rose 0.2% and 2.6% over the past 12 months.
While the CPI is still above the US Federal Reserve target rate of 2%, the rise in prices is the lowest in the past 9 months and Core CPI has not been this low since 2021.
Meanwhile, alternative inflation tracker Truflation reported figures even lower than the official numbers.
Yesterday, Truflation posted on X that CPI stood at 0.74% and PCE 1.27% [personal consumption expenditures].
Truflation commented on the BLS numbers this morning:
“Truflation correctly predicted the numbers would come in cooler than the market consensus of 2.5%, between 2.2% and 2.4%, when we extrapolate our rapidly cooling numbers to the BLS CPI.”
And;
“We hope the BLS will catch up with the real price trends.”
Affordability and mortgage interest rates have become a hot topic for consumers as the midterm election nears. While Republicans have noted that things have improved dramatically, especially compared with the Biden Administration’s hyperinflation, which was packaged as transitory at that time, voters typically look only at how they feel today. Democrats have leveraged this narrative, pointing a finger at the Trump Administration for failing to address price increases. As voters often vote with their pocketbooks, Democrats believe they can capitalize on current events, even though Republicans have so far delivered on their promises, to recapture the Senate and House.
As a new Fed Chair is expected to take over this summer, the pace of rate reductions could change.
