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Posted on 02/13/2026 7:43:35 AM PST by SeekAndFind
Key Insight: Inflation showed signs of cooling in January, with the annual inflation rate dropping to 2.4%.
Supporting data: Prices excluding food and fuel rose 0.3% in January, while food increased 0.2% and energy prices ticked down by 1.5%, the report found.
Forward look: The January inflation reading remains slightly above the Fed's longstanding 2% target and is likely to reinforce a cautious stance toward further rate cuts, though President Trump will likely continue to push the central bank to lower rates.
In recent months, as consumers face an affordability crisis, the Trump administration has rolled back tariffs on dozens of food items. The administration has also continued to reach trade deal frameworks with countries that it says will lead directly to lower tariffs.
The Bureau of Labor Statistics said that the price of housing “was the largest factor” in the increase for the month, rising 0.2%. The same went for the “food at home” category, which tracks grocery prices.
The price of energy was among the biggest drops in January, falling 1.5%.
Core inflation, which strips out volatile categories, was also right in line with expectations. That could help bolster the argument that recent rate cuts and actions by the administration are working to bring inflation under control after it soared to 3% in September last year.
(Excerpt) Read more at americanbanker.com ...
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I would imagine dropping rates right now would be tossing gas onto a fire that is burning just fine.
If we truly come out of the quarter at 5%, the would be wonderful. We don’t need 7% or 10%.
And a dow at 100,000 in three years would lead to an inflationary nightmare.
For those interested in interest rate trends…
See here:
https://www.nbcnews.com/business/economy/january-inflation-report-trump-tariffs-rcna258842
[EXCERPT]
Friday’s report comes just two days after the delayed January jobs report, which looked positive for the month but included major revisions to recent hiring data that painted a gloomier picture.
Preliminary data had indicated that the U.S. economy added 584,000 jobs in 2025. But the Bureau of Labor Statistics revised the number down Wednesday to just 181,000 jobs.
The Federal Reserve has for months been balancing its two mandates — stable prices and full employment — on what some experts have described as a knife’s edge.
“Based on my forecast, we could be on hold for quite some time,” Federal Reserve Bank of Cleveland President Beth Hammack said Tuesday.
Hammack expects inflation to ease as the year progresses, but currently, she says, “inflation is still too high.”
The "affordability crisis" is a rat talking point.
The Market liked the news.
Why would lower inflation prevent you from lowering rates? That’s the opposite of how it usually works. The jobs report might be in the other direction but it’s higher inflation that usually means the FED needs to keep rates higher.
I remember having an ongoing affordability crisis in the late 70’s, early 80’s, mid-80’s. Inflation was very high of course. I solved the problem by having 3 little one-man businesses until my main business grew enough to cut back to two.
It’s good that it’s low, but that’s another 2.8% on top of the massive Biden inflation. We should be working to get the inflation rate to zero, or even a negative number.
Yep. In Virginia, thats the code word dims used in the last election. They promptly got into office and made everything more expensive. Could not care less about citizens.
As is the Fed's conventional wisdom on rates and inflation.
This measure was corrupted a bit by shutdown.
Probably more important, the recent 10% uptick in oil would not have reached retail inflation yet so this is understated a bit.
PCE will tell the actual tale and it’s a week or two away. Definitely a superior measure over CPI.
There is no reason to tie inflation to tariffs. Inflation can assert itself regardless of tariffs.
“We should be working to get the inflation rate to zero, or even a negative number.”
That would be insane and will never be attempted. Deflation kills everything.
The FED is fine where it is. It has to balance between employment and inflation and this is the best it fan do at this time do to govt spending which isn’t going to change.
Stop federal government deficit spending.
And no, private sector borrowing is not part of it. They pay their loans back.
Truth is stranger than fiction.....
The affordability crisis was caused by 9% Biden and is cumulative. Only way back is to have a deflationary period which the FED will never, ever consider due to them causing the Great Depression or until productivity increases dramatically or wages catch up.
By the way, it’s been 5 years since the FED achieved 2.0% inflation and that was during a recession.
It took a 20% FED rate and a 9.71% unemployment rate to fix it the last time inflation wouldn’t slow down during the early 80’s.
Are the rules changing? It is believed AI might increase productivity so much that we have a risk of deflation. Productivity’s is increasing with fewer employees on a larger and larger scale.
Worth considering.
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“The reason so many people misunderstand so many issues is not that these issues are so complex, but that people do not want a factual or analytical explanation that leaves them emotionally unsatisfied. They want villains to hate and heroes to cheer—and they don’t want explanations that fail to give them that.”
~ Thomas Sowell, Dismantling America pg. 334 (2010)
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