At 8:30 a.m. in New York, the world paused to hear the release of US inflation statistics for January, which were released to a hushed thud.
Composite CPI was +2.4% year-on-year, slightly lower than the +2.5% forecast floated before the announcement. Core inflation, which excludes food and energy, rose 2.5% from a year earlier, in line with expectations.
Prices continued to move at a familiar pace that month. Headline inflation rose by a seasonally adjusted 0.2% in January, while core inflation rose by 0.3%. At first glance, it looks calm, but when you look at the area under pressure, there is a lot of texture left.
Shelters rose 0.2% from the same month, with BLS noting shelters as the largest contributor to the overall increase. Energy fell 1.5% in January, while gasoline fell a seasonally adjusted 3.2%. Airfares rose 6.5% from the same month, used cars and trucks fell 1.8%, and auto insurance fell 0.4%.
Throughout the year, the direction of progress remained the same. The all-item index rose 2.4% in the 12 months to January, following a 2.7% rise in December, while the core index remained at 2.5% year-on-year. Over the year, shelter rose 3.0%, food rose 2.9%, and energy fell 0.1%.
There is a quiet complexity to the official record.
The BLS notes that CPI data for October and November 2025 remains unavailable due to appropriations lapses, and the Cleveland Fed’s Cleveland Nowcasting page highlights the missing CPI release for October 2025, which was delayed due to last year’s government shutdown. When there are holes in the record, models and agents take on a bigger role and confidence becomes part of the story.
The number then leaves the government website and goes on the market. Short-term interest rates begin to absorb it and the rest of the risk world tilts.
One simple measure is the two-year Treasury yield. According to FRED, the latest data for February 11th was around 3.52%, up from 3.45% the previous day. That yield competes directly with risk appetite, setting the baseline return for doing little and changing how expensive it feels to shoot for upside.
Crypto is feeling that change happening quickly, and the plumbing tells us why. DefiLlama’s tracker estimates the total market capitalization of stablecoins at around $307 billion, which are pools of cash-like liquidity that traders use to turn into volatile assets.
When that pool grows, the market often seeks optionality; when the pool stalls, the market often seeks yield and certainty.
Bitcoin rose 6% during the day, absorbing some of the stablecoin liquidity and once again threatening $70,000. However, after multiple failed attempts to break above $71,500, there is a big question mark over whether the price can maintain upward momentum beyond a short-term relief rally.
Fed is solid, polls show where the pressure is
The Fed has been telling a consistent story and maintained a consistent tone during its January meeting. In a Jan. 28 statement, the FOMC maintained its target range for the federal funds rate at 3.5% to 3.75% and said inflation “remains moderately elevated.”
Voting in that decision is a part worth sticking with.
Two officials, Stephen I. Millan and Christopher J. Waller, objected and wanted a quarter-point reduction at that meeting, according to the same record of decision written by Millan. This is a glimpse into the internal pushes and pulls and gives the market permission to continue asking loud questions about timing.
Now, the calendar tightens the story. The next major checkpoint is a meeting on March 17-18, with a statement and press conference scheduled for March 18. That meeting will be held after the next CPI report, a year after policymakers are already charting a path toward long-term interest rate cuts.
The path lies in the Fed’s outlook. A summary of economic forecasts showed that the median expected federal funds rate at the end of 2026 is 3.4% and the median expected 2026 core PCE inflation rate is 2.5%. In layman’s terms, officials expect interest rates to fall as inflation gradually cools, and the range of results remains wide enough to keep all data points meaningful.
This is why printing the CPI 2.4% headline is important. This supports the idea that inflation continues to move closer to its target zone, and market attention remains focused on how quickly the Fed can move from holding to easing.
The next print is already on the board
The market rarely waits for the next release and starts setting prices the moment the last release is released. This is where nowcasting comes in, especially when data gaps are in the background.
In the Cleveland Fed’s nowcast (updated on February 12), February 2026 CPI is expected to be 2.36% year-on-year, core CPI is expected to be 2.42% year-on-year, and the month-on-month forecast is 0.22% for headline and 0.20% for core. These are model estimates that form expectations in real time, and expectations form positioning.
The next official date has also been decided. According to the BLS schedule, the February CPI report will be released on Wednesday, March 11th at 8:30 a.m. ET, and that morning will set the tone for the March Fed meeting. Traders will continue to circle that date in bright ink, as will those trying to speculate on how quickly interest rates will ease.
Now and then, stories are based on the same everyday categories. Energy cools quickly, gas prices drop in a week, airfares can go up and down, and shelters move like the tide. The report shows that shelters continued to rise during the month and that shelters were still up 3.0% on the year, both of which are detailed in the January shelter details.
This is why the human experience of inflation often takes a backseat to the headlines. Even if top-line numbers appear to be calming, rent and housing-related expenses tend to linger.
Zoom out and the global background keeps this story alive
US inflation data always feels local and always reflects globally. Money moves across borders faster than most narratives can keep up, and slowing US inflation trends change the temperature of global risks.
The IMF projects global growth to be 3.3% in 2026 and 3.2% in 2027, and expects global inflation to decline while U.S. inflation will gradually return to target. This sets the standard for the world to continue moving forward and central banks to continue looking for spots where prices reheat.
In a similar vein, the OECD predicts that the global GDP growth rate will slow from 3.2% in 2025 to 2.9% in 2026, and also points out that excessive valuations and rapid growth in crypto asset market capitalization are noteworthy from a financial stability perspective. When the macro backdrop is both resilient and risky, speculative markets tend to move in waves, and all CPI results are a way to measure which waves are rising.
Three paths from here and why cryptocurrencies continue to attract attention
This simple framework is a way to stay grounded every time new numbers try to take over the narrative.
- The first pass is constant cooling. Inflation headlines are trending toward the low 2 level, cores are gradually following suit, shelter policy continues to ease, and the Cleveland Fed’s nowcast is sitting around there today. In that world, rate cuts are more likely to be justified later this year, financial conditions ease, and cryptocurrencies tend to benefit from a sentiment shift from caution to deployment.
- The second path is persistent inflation. The services sector remains strong month-over-month, shelter-in-place continues, energy support ends, and the Fed remains cautious, which is reflected in January’s interest rate decisions. In that world, yields remain competitive, liquidity is selective, and cryptocurrencies can still rise and cause sharp declines if the opportunity cost of holding risk feels high.
- The third path is growth instability. Inflation is cooling, the real economy is softening, policy easing is coming sooner, and risk appetite is becoming more emotional in the process. Global trends in the IMF’s view leave room for resilience and shocks, and that uncertainty is part of trade.
In all three paths, stablecoins are important as simple scoreboards of cryptocurrency liquidity. A base of approximately $307 billion has significant purchasing power and is also a large amount of capital that can be stored in cash-like form if yields look attractive.
human harvest
CPI 2.4% sounds like a pretty headline in print, but it accomplishes two things at the same time. That calms the macro mood and leaves many people still feeling the pain of shelter and other stubborn costs.
Most people experience inflation through the categories they touch on a daily basis. Shelters creep in, food stays expensive, insurance is personal, travel fluctuates, and those little bursts of price pressure land exactly where life needs them.
Cryptocurrencies are downstream from the same reality, trading moods around interest rates and liquidity with hair triggers. As inflation subsides, the debate over lower interest rates grows, the tip of the curve reacts, and the cash pools within the cryptocurrencies that underpin stablecoins become more willing to take risks.
The next date is close enough to make plans.
The next CPI release is March 11th, the next Fed meeting is March 17th-18th, and the schedule is locked into the Fed’s March dates.
The market will continue to monitor shelters, yields, and stablecoins to determine what kind of year these numbers add up to.