The US December CPI just came out, with a year-on-year increase of 2.7%, which looks pretty good. But interestingly—economists generally believe this number might be inflated. The statistical distortions caused by the government shutdown have faded, and the true face of inflation might be even more stubborn than the data suggests.

The core CPI released on January 13 also showed a year-on-year increase of 2.7%, with a month-on-month rebound to 0.3%. At first glance, everything seems calm, but in reality, the market has sensed something is off. Inflation is more sticky than expected, and staying above the Federal Reserve’s 2% target is still quite clear.
This directly impacts the Fed’s policy expectations. The interest rate decision at the end of January is basically a done deal to keep rates unchanged. There’s no room for rate cuts anymore.
Asset markets reacted quite straightforwardly: gold initially fell then rose, now holding steady at a record high of $4600, supported mainly by central bank gold purchases and safe-haven demand. US stock futures are quite resilient, shifting market attention from inflation concerns to earnings season, with AI chains supporting tech stocks, and mild inflation isn’t bad news for cyclical sectors. The US dollar index slightly rebounded to the 98-99 range, and short-term interest rate differentials can still support the exchange rate, but Trump’s pressure on the Federal Reserve could become a long-term credit risk.
This CPI data is quite dramatic—appearing to meet the target, but actually revealing the stubbornness of US inflation. How much truth was hidden in the data revisions after the shutdown? It’s hard to say.
What do you think about this CPI data? Is there really some "adjustment" behind it? Can gold break through $4600 driven by safe-haven sentiment?
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