Inflation Cools: What the Latest CPI Numbers Mean for Your Money

Here’s the breakdown:

• The CPI rose at a 2.7% annual rate—much lower than the 3.1% economists called for.

• “Core” CPI (stripping out food & energy) was even softer, rising only 2.6% over the year vs. 3% predicted.

• Month-over-month, both headline and core inflation were up just 0.2%, another cooler-than-expected print.

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Why does this matter?

• Food prices are up 2.6% and energy’s up 4.2% year-over-year, but the real win is in shelter costs—up just 3%, inching closer to the Fed’s 2% inflation goal.

• This report was a bit unusual (classic government shutdown move), so some October data is missing. Economists are cautious, but the trend still looks positive.

What’s next for the Fed & your wallet?

• The Fed has already cut rates three times this year. With inflation easing, the odds of another rate cut in early 2026 just jumped—traders see nearly a 60% chance at a March cut.

• Stocks rallied immediately after the news, snapping a four-day losing streak, and bond yields fell. Translation: The market is betting on easier money ahead!

What should you watch?

• Keep an eye on shelter and wage trends—they’ll drive the next moves in both inflation and interest rates.

• Don’t overreact: This is good. Things are heading in the right direction.

Bottom Line

• Inflation is cooling. The Fed is paying attention, and the outlook for 2026 just got a little brighter. Make sure your positioned for opportunity. Don’t get caught on the sidelines.