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2026-02-13 21:50:57
[El-Erian: Core CPI Meets Expectations, But the US Has Entered the Sixth Year of Inflation Exceeding Target] ⑴ Allianz Chief Economic Advisor Mohamed El-Erian stated that the US January core CPI was completely in line with market expectations, while the overall CPI was slightly lower than expected, which is good news. ⑵ However, he pointed out that what is less optimistic is that, as other inflation data shows, the US economy has now entered the sixth year that inflation has consistently exceeded the Fed's target. ⑶ Specifically, the data shows that the January core CPI remained stable at 0.3% month-on-month, in line with expectations, while the overall CPI rose 0.2% month-on-month, slightly lower than the expected 0.3%. Annual inflation indicators declined slightly to 2.5% for core and 2.4% for overall, respectively. ⑷ The bond market reacted quickly to these data, initially pushing the 10-year US Treasury yield down to 4.08%, the lowest level this year. ⑸ From a market perspective, the lower-than-expected overall CPI provided short-term buying support for US Treasuries, but El-Erian's comments reminded the market that long-term inflation stickiness has not disappeared, and the Fed is still far from its 2% target. ⑹ Looking ahead, attention should be paid to the evolution of inflation data in the coming months, especially whether the core services and goods sub-sectors will remain resilient, as this will determine the timing and magnitude of the rebound in US Treasury yields.
