#Gate广场创作者新春激励 Focus on tonight at 21:30, why does the US December CPI matter to the world?

Tonight (January 13th) at 21:30, an economic data release that can make the global financial markets "hold their breath" is coming — the US December Consumer Price Index (CPI).
Some may ask: Isn’t CPI just a price index? Why is it so closely watched?
Let’s understand the background and the economic secrets behind this data.
What exactly is CPI?
First, clarify the core concept: CPI stands for Consumer Price Index, which is simply an "economic thermometer" measuring the change in prices of a basket of goods and services that residents buy daily.
This basket includes categories closely related to daily life such as food, clothing, rent, transportation, and healthcare. By calculating their price changes, it directly reflects the inflation level:
- If CPI rises quickly, it indicates rising prices and strong inflation pressure;
- If it rises slowly or falls, it may signal deflation.
There’s also the concept of "Core CPI," which excludes highly volatile food and energy prices to better reflect the long-term trend of prices. This time, the market is focused on the overall CPI and core CPI for December.
Key Outlook: How will December CPI change?
Based on market forecasts, the US December CPI is likely to "rise slightly":
- Overall CPI is expected to increase by 0.3% month-over-month (compared to a 0.3% increase in November),
- Year-over-year, it is expected to rise by 2.7% (compared to December last year).
The forecast for core CPI is similar, with both month-over-month and year-over-year increases of 0.3% and 2.7%, respectively.
A critical reminder here: the CPI increase this time may partly be a "technical lift," not a sign of a real sharp rise in inflation.
What is "technical lift"?
Simply put, it refers to the missing price data in October due to the US government shutdown. When the statistical agencies calculated November data, they had to fill the gap with assumed values, which artificially suppressed some prices of goods and rents. By December, this "suppressed" effect may rebound, making the data look like it increased more, but this is a statistical distortion, not a real price trend. Experts warn to be cautious about monthly CPI fluctuations before the official revisions are made. Some experts from Oxford Economics even predict that December’s month-over-month CPI could rise to 0.4%, higher than market expectations, and that the true inflation trend may not be clear until mid-year.
Deeper Impact: What factors are influencing inflation?
Besides statistical factors, several key variables are affecting US inflation, making this CPI data more noteworthy:
1. The "ongoing pressure" and "approaching turning point" of tariffs
Starting from 2025, the Trump administration imposed "reciprocal tariffs" on multiple countries, directly raising the prices of imported goods such as food, clothing, and automobiles — all previously significant drivers of inflation. The good news is that this tariff pressure may be nearing a turning point. Experts say that inflation may slightly rise in early 2026 but won’t skyrocket. The impact of tariffs will continue for a while but won’t hinder inflation from falling long-term.
2. The "life-and-death" decision on tariff rulings
The US Supreme Court was supposed to announce last Friday whether Trump’s tariffs are legal, but the decision was delayed until this Wednesday. Lower courts had already ruled the tariffs illegal; if the Supreme Court also overturns the tariffs, the cost pressure on imports will gradually ease, and prices in related categories may cool down faster. But if tariffs are upheld, prices could stay high for a long time and be difficult to bring down.
3. Powell’s survey and non-farm payroll data’s "double boost"
Last Friday’s US non-farm payroll data (which reflects changes in non-agricultural employment and indicates the strength of the labor market) has led markets to believe that the Federal Reserve will not cut interest rates in January.
According to the CME FedWatch tool (which reflects market expectations for Fed rate adjustments), 95% of traders believe the Fed will likely "stay put" in the short term, with rate cuts more probable in spring or mid-year.
Adding to the complexity, Fed Chair Powell is under investigation by the Department of Justice for allegedly perjury, raising concerns about the "independence of Fed policy." Although Powell responded that decisions are based solely on data and law, this "political noise" has increased the importance of economic data.
Tonight’s CPI data will be a key reference for judging the Fed’s next move.
Final summary: Why is this CPI data so important?
In simple terms, although the US December CPI shows only a "slight increase," the timing of its release is particularly critical:
We are currently at a crossroads of uncertain tariff policies, controversial Fed policies, and complex employment signals.