#CPIWatch : Inflation Pulse Check

The latest inflation snapshot shows a cooling trend gaining traction, offering cautious optimism for consumers and policymakers alike. Core categories — especially shelter and services — remain sticky, but the broader disinflation pattern continues to firm.

Headline CPI decelerated as energy prices eased and food inflation saw its slowest monthly gain in over a year. For households, the shift is subtle but real: grocery staples are stabilizing, and fuel costs have moved off recent highs.

Yet the Federal Reserve’s focus remains squarely on services inflation, where wage pressures continue to play tug-of-war with policy tightening. Markets reacted with moderate relief, pricing in increased odds of rate stability over the coming months.

Bottom line:

Inflation’s direction is improving, but the journey back to target remains incomplete. Keep an eye on shelter costs and service-sector wages — the two metrics most likely to decide the Fed’s next move.