CORE CPI NEARLY AT A 5-YEAR LOW — IS THE FED WRONG?
US inflation just surprised again.
Headline CPI came in at 2.4% the lowest level in 9 months.
Core CPI dropped to 2.5% its lowest reading since March 2021.
Inflation isn’t re accelerating. It’s cooling.
For months, Jerome Powell and the Fed have warned that tariff driven inflation would start picking up again. Instead, inflation has been trending lower since Q3 2025 especially Core CPI, which is the Fed’s preferred gauge.
If Core CPI continues on this path, the bigger risk may not be inflation… but disinflation potentially even deflation.
That raises a serious question:
Was the Fed too tight for too long?
With the US economy already showing signs of slowing, policy missteps at this stage could come at a cost.
The next move from the Fed just became even more critical.