13 January 2026
If you are covering the latest US inflation figures, please find below a comment from Lindsay James, investment strategist at Quilter:
“US inflation continues to fluctuate as data collection returns to normal once more following the government shutdown earlier this year. Today’s figures place the annual rate at 2.7%, up from 2.6% last month. This does still follow a fall from 3% in September, although October’s data wasn’t collected due to the shutdown, but this was likely distorted to some extent as a result given the Bureau of Labor Statistics had to make certain assumptions in order to produce November’s figures. These latest figures are a sign of some of this effect reversing.
“Tariffs have been putting upwards pressure on good prices throughout 2025, with the latest figures showing commodities, or goods, prices rose 1.4% year over year in December. This figure was negative for much of the decade before the pandemic, with cheap imports a crucial offset to higher services inflation, allowing both overall CPI and interest rates to remain low. We are now seeing rising goods prices with service cost inflation cooling, yet still above its long-term trend.
“Looking ahead, it may be the case that with mid-term elections approaching with polling weak and clear attention once more on the cost of living, we may see certain tariffs quietly sidelined, especially with foreign policy announcements dominating. With shelter costs tracking cooling house prices with a time lag, and surplus liquidity from the pandemic years also now eliminated, headline inflation may head back towards target in the year ahead. We also face the uncertain outcome of a Supreme Court decision on the legality of certain tariffs, with a decision due in coming weeks.
“However, whilst it is traditional for central banks to focus heavily on economic data, the latest attacks on Fed Chair Jerome Powell signify that Donald Trump wants lower interest rates regardless. With attention potentially shifting to the courts, it may be that it is the lawyers rather than the economists that have greater sway over monetary policy in the coming months.”
