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 expected to show that prices remained broadly stable in the last month of 2025. As always, it’s a key read on inflation and could stir some short-term moves in the US Dollar (USD).
That said, it’s unlikely to shift the bigger picture for the Federal Reserve (Fed) just yet. With policymakers still focused primarily on the health of the domestic labour market, the data would probably need to deliver a real surprise to trigger any rethink on monetary policy.
What to Expect in the Next CPI Data Report?
Inflation itself isn’t expected to spring many surprises. Headline CPI is seen rising 2.7% YoY in December, unchanged from the previous month. Strip out the more volatile food and energy components, and the picture is much the same: core inflation is forecast to edge up slightly to 2.7% from 2.6%, still uncomfortably above the Fed’s target.
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On a monthly basis, both headline and core CPI are expected to come in at a fairly steady 0.3%, reinforcing the idea of inflation that’s easing only slowly rather than rolling over.
That also helps explain why December’s rate cut was never a slam dunk. The Minutes released on December 30 show a deeply split Committee, with several officials saying the call was finely balanced and that leaving rates unchanged was a very real alternative.
Previewing the report, analysts at TD Securities noted,
How Could the US Consumer Price Index Report Affect EUR/USD?
Investors are still chewing over a mixed set of signals from December’s Nonfarm Payrolls (NFP), but that debate is starting to take a back seat. Fresh threats to the Fed’s independence have resurfaced, and they risk overshadowing the significance of Tuesday’s inflation data altogether.
Given that the Fed is still keeping a close eye on the labour market, December’s CPI numbers are unlikely to change the policy picture in any meaningful way, unless inflation throws up a genuine surprise, one way or the other.
Turning to EUR/USD, Pablo Piovano, Senior Analyst at FXStreet, shared his technical outlook.
Source: https://beincrypto.com/us-cpi-report-fed-inflation-impact-eur-usd/
