The latest data released by the U.S. Bureau of Labor Statistics shows that the December CPI increased by 2.7% year-on-year, which is in line with economists' expectations, and the month-on-month increase was also 0.3%, basically in accordance with market forecasts. What does this number mean? It indicates that inflationary pressures have neither worsened nor significantly eased — it’s a stable situation.

More notably, the performance of the core CPI deserves attention. Excluding food and energy, the December core CPI rose by 2.6% year-on-year, with a month-on-month increase of only 0.2%, which is lower than the 0.3% expected by economists. In other words, after removing the more volatile food and energy prices, underlying inflation is actually slowing down.

However, it should be noted that the quality of the data itself has some flaws. Due to the earlier government shutdown, the CPI data for October was not released normally, and November’s data was also abnormal due to insufficient collection. By December, data collection and processing finally returned to normal, but economists generally believe that these technical effects will take time to fully dissipate.

From a market perspective, this stable CPI data is likely to support the Federal Reserve in maintaining interest rates at the January 27-28 monetary policy meeting. Meanwhile, there are no signs of deterioration in the labor market — the unemployment rate in December actually fell to 4.4%. However, one point to watch is that inflation has exceeded the Fed’s 2% target for 55 consecutive months, and this situation has become the norm.

Looking ahead, economists generally expect that as companies begin to pass on tariff pressures to consumers, price pressures may rise again in the coming months. This could be a potential variable for the market.