Friday’s inflation report out of the US looked like a non-event at first blush, with one (not insignificant) caveat: A measure of underlying services sector price growth that strips out housing was very warm.

The overshoot on the so-called “supercore” measure — which I’ll quantify below — could be an artifact of a post-pandemic macro seasonal that tends to manifest in overshoots across a variety of aggregates early in the calendar year, only to reverse course later.

With that proviso, headline price growth was 0.2% in January and the core measure printed an as-expected 0.3% advance for the month (0.295% unrounded).

There’s the chart. The MoM pace was the warmest since August, but the YoY rate, at 2.5%, was the coolest since March of 2021. (As a reminder: We’re never going to know what the MoM prints were for October and November. The placeholders in the chart are imputed. With the exception of gas and new and used cars, those columns will remain forever empty in the BLS release.)

As discussed at some length in this week’s macro preview, Donald Trump’s going to get his rate cuts (plural) this year, it’s just a matter of how many. Relatedly, Kevin Warsh, SOMA hawk, will have to contend at some point with an overtly autocratic US president who needs (expects) a well-behaved long-end despite a still-deteriorating fiscal trajectory and an early-2027 increase in coupon auction sizes.

In other words: If there’s no recession (and there really “can’t” be considering this is an election year) to justify rate cuts and keep the long-end bid, Warsh will have to find another excuse. Because not cutting rates and “sticky”-higher 10-years and out yields are a non-starter for Trump.

Given that political reality, anything other than devastatingly high inflation prints shouldn’t impact the outlook for US monetary policy in 2026. I saw a lot of commentary mid-week suggesting the apparent re-heat in the labor market (as tallied by a hapless, hamstrung BLS, anyway) somehow means the Fed’s less likely to deliver rate cuts. That’s only as true as Powell’s tenure is long, and the clock on his chairmanship’s ticking down under four months.

Seen through that lens, these inflation figures simply don’t matter all that much if they matter at all. The idea that a lingering half-point overshoot to target is going to dissuade a Trump-beholden Fed from cutting rates is little short of risible. (The Fed targets PCE not core CPI, but you get the idea.)

As to the “supercore” heater mentioned here at the outset, it was significant where that means the MoM rate nearly quintupled to 0.60%. That’s the fastest pace for the core services ex-shelter metric in a year, and as noted above, keen market participants may see in that a false positive — an unreliable blip consistent with pandemic-era seasonality. Both of the underlying shelter measures — OER and rent — printed only modest advances, and used vehicles showed a decline. Core goods was very benign.

So, if you can look past the “supercore” overshoot, this was a mostly forgettable release. Whether it’s advisable to dismiss that overshoot is debatable.

Remember: Average hourly earnings came in warm in the January jobs report. Three years ago, the combination of a hot “supercore” CPI update and a warm AHE print would’ve been cause for consternation. But with the (admittedly backward-looking) Employment Cost Index suggesting no cause for concern on the wage-price spiral front, I doubt anyone will get too worked up.