US Core CPI Hits 2.5% Target in January: Stability Amid Global Market Jitters

Market snapshot: The latest data from the US Bureau of Labor Statistics confirms that core inflationary pressures are stabilizing. The U.S. Core Consumer Price Index (CPI) for January 2026 rose by 2.5% year-on-year, perfectly aligning with market expectations and cooling slightly from the 2.6% recorded in December 2025. This deceleration comes despite recent supply-side disruptions and a partial government shutdown in late 2025 that delayed several high-tier economic releases. While the headline figures remain above the Federal Reserve's long-term 2% mandate, the core metric's alignment with consensus offers a temporary sigh of relief for global central banks, including the RBI, which are currently balancing growth with persistent external headwinds.

Summary: US Core CPI for January 2026 met expectations at 2.5%, down from 2.6% previous. The alignment with estimates suggests a steady path for the Federal Reserve, though Indian markets remain volatile due to sector-specific AI shocks.

Key Takeaways

• Core CPI inflation (YoY) cooled to 2.5%, matching consensus estimates and indicating a controlled disinflationary trend.
• The Federal Reserve is expected to maintain its current interest rate range of 3.5%–3.75% in the upcoming March meeting, prioritizing data dependence.
• Global markets, specifically the Indian IT sector, are reacting more to tech-specific disruptions ('Anthropic shock') than the macro inflation print.

SAHI Perspective

From a SAHI lens, the CPI print is a 'non-event' in the sense that it does not disrupt the existing disinflationary narrative. However, the lack of a downward surprise means the Federal Reserve is unlikely to accelerate rate cuts. For Indian investors, the real focus remains the widening gap between global macro stability and the micro-shocks hitting the Nifty IT index. We maintain a neutral stance on broad indices but see high-performance opportunities in domestic-focused banking and auto stocks which may benefit from eventual global liquidity easing.

Closing Insight

While macro-stability in the US provides a solid floor for global sentiment, Indian markets are navigating a high-volatility phase driven by tax changes and technology-led shifts. Investors should focus on quality earnings over macro-tracking.

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Synthetically modified: AI-generated content by Sahi Live News Engine.