CPI report shows cooling prices, boosting hopes for a soft landing.
The latest Consumer Price Index (CPI) report brought welcome news for the economy, showing inflation continuing to moderate.
The Numbers
- Headline CPI: 2.7% year-over-year (expected 2.9%)
- Core CPI: 3.1% (expected 3.3%)
- Month-over-month: 0.1% (expected 0.2%)
What’s Driving the Decline
Several factors contributed to the better-than-expected reading:
- Energy prices: Gasoline down 8% from last year
- Used cars: Prices falling as supply normalizes
- Rent growth: Finally showing signs of slowing
Impact on Your Wallet
Lower inflation means your purchasing power is eroding more slowly. For young people:
- Grocery prices stabilizing
- Rent increases moderating
- Student loan real burden decreasing
Fed Implications
This data supports the case for rate cuts in 2025, which would be bullish for:
- Stocks (especially growth)
- Bonds
- Real estate
The economy might just pull off the elusive soft landing after all.