Canada Retaliatory Tariffs on U.S. Goods Take Effect 
Japan Foreign Reserves Plunge $79.6 Billion After Record Yen Intervention 
Japan, U.S. Stay Aligned on Yen as Currency Surges 
Asian Currencies Mixed as Yen Rallies on BOJ Bets 
Iran Plans New Gulf Restricted Zone as Hormuz Tensions Push Oil Higher 
Gold Prices Rise as Yen Rally Weakens Dollar 
US Stock Futures Mixed as Strong Jobs Data Boosts Fed Rate Hike Bets 
Iran Vows Tougher Response as U.S. Sanctions Squeeze Economy 
US Stock Futures Mixed as Fed Rate Hike Bets Rise 
Yen Rebounds as BOJ Rate Hike Bets Rise 
China to Inject $45 Billion Into State Financial Institutions 
Hungary Industrial Output Beats Forecasts With 4.7% July Growth 
Asian Stocks Mixed as Korean Chipmakers Rally 
European Stocks Flat as Iran Tensions, ECB Rate Hike Loom 
Japan GDP Growth Beats Forecast, Boosting BOJ Rate Hike Bets 
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U.S. consumer prices rose less than expected in January, offering modest relief to households as gasoline and rental costs eased. However, persistent increases in service-related expenses suggest the Federal Reserve may hold off on cutting interest rates until later in the year.
According to the Labor Department, the Consumer Price Index (CPI) increased 0.2% in January, following a 0.3% rise in December and below economists’ forecasts of 0.3%. On an annual basis, inflation slowed to 2.4%, down from 2.7% in December. The moderation was largely due to falling gasoline prices, which dropped 3.2% month-over-month, and softer shelter costs, including rents and hotel stays, which rose 0.2%.
Food prices climbed 0.2% in January after jumping 0.7% in December. Grocery prices edged higher, though declines in beef, eggs, coffee, and fresh produce helped offset increases in cereal and baked goods. Despite monthly relief, food prices remain 2.9% higher than a year ago. Electricity prices dipped slightly in January but surged 6.3% year-over-year, partly reflecting rising energy demand from data centers supporting artificial intelligence infrastructure.
Core CPI, which excludes volatile food and energy prices, increased 0.3% after a 0.2% gain in December. Service inflation remained firm, with airline fares soaring 6.5% and hospital services rising 0.9%. Personal care, recreation, and communication services also recorded notable increases. Meanwhile, used car prices fell 1.8%, helping keep overall core goods prices stable.
Year-over-year core inflation slowed to 2.5%, its lowest level since March 2021. Still, both CPI and the Federal Reserve’s preferred Personal Consumption Expenditures (PCE) price index remain above the Fed’s 2% target. Strong job growth and a 4.3% unemployment rate further reduce urgency for immediate rate cuts.
While financial markets are increasingly betting on a potential June rate cut, economists expect inflation to remain sticky in the first half of the year, influenced by import tariffs and the weaker U.S. dollar.
