US inflation cools more than expected, kindling hopes of Fed rate cut

The US consumer price index rose 2.4% year-on-year in January, the lowest level since May 2025, exceeding analysts' expectations and prompting hopes for further interest rate cuts by the Federal Reserve. President Donald Trump, however, claimed that inflation has been "defeated" under his administration, while economists caution that sustained improvement is needed before policymakers can feel comfortable cutting rates. Despite a slight dip in energy prices, food costs remained elevated, and some experts believe disruptions from the recent government shutdown may be artificially suppressing year-over-year inflation figures.