CPI Data Set to Show Steady US Inflation in December, Still Above the Fed’s Target

The US Bureau of Labor Statistics (BLS) will publish December’s Consumer Price Index (CPI) report on Tuesday at 13:30 GMT. The report is anticipated to present that costs remained broadly steady in the final month of 2025. As all the time, it’s a key learn on inflation and will stir some short-term strikes in the US Dollar (USD).

That mentioned, it’s unlikely to shift the greater image for the Federal Reserve (Fed) simply but. With policymakers nonetheless centered totally on the well being of the home labour market, the information would most likely want to ship an actual shock to set off any rethink on financial coverage.

What to Expect in the Next CPI Data Report?

Inflation itself isn’t anticipated to spring many surprises. Headline CPI is seen rising 2.7% YoY in December, unchanged from the previous month. Strip out the extra unstable meals and vitality elements, and the image is far the similar: core inflation is forecast to edge up barely to 2.7% from 2.6%, nonetheless uncomfortably above the Fed’s goal.

On a month-to-month foundation, each headline and core CPI are anticipated to come in at a reasonably regular 0.3%, reinforcing the concept of inflation that’s easing solely slowly relatively than rolling over.

That additionally helps clarify why December’s rate cut was never a slam dunk. The Minutes launched on December 30 present a deeply break up Committee, with a number of officers saying the name was finely balanced and that leaving rates unchanged was a really actual various.

Previewing the report, analysts at TD Securities famous, 

“Following the influence from the authorities shutdown, we now anticipate the core phase to peak at 3% in Q2. We stay of the view that gradual disinflation will probably be the story in H2 2026. We count on core CPI inflation to finish the yr at 2.6%.”

How Could the US Consumer Price Index Report Affect EUR/USD?

Investors are nonetheless chewing over a blended set of indicators from December’s Nonfarm Payrolls (NFP), however that debate is beginning to take a again seat. Fresh threats to the Fed’s independence have resurfaced, and so they danger overshadowing the significance of Tuesday’s inflation data altogether.

Given that the Fed remains to be conserving an in depth eye on the labour market, December’s CPI numbers are unlikely to change the coverage image in any significant approach, except inflation throws up a real shock, a method or the different.

Turning to EUR/USD, Pablo Piovano, Senior Analyst at FXStreet, shared his technical outlook. 

“If EUR/USD decisively slips under the short-term 55-day transferring common at 1.1639, it could open the door to a deeper pullback, with the 200-day SMA at 1.1561 coming into focus sooner relatively than later,” he notes. “Below that, consideration would flip to the November low at 1.1468 (November 5), adopted by the August trough at 1.1391 (August 1).” “On the flip aspect, a clear break above the December peak at 1.1807 (December 24) would shift the tone again to the upside. That would put the 2025 high at 1.1918 (September 17) on the radar, with the psychologically vital 1.2000 stage lurking simply past,” Piovano provides.

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