Inflation Is Contained. Tariffs Aren’t the Problem. The Fed Should Cut Rates.

The December CPI report delivers three clear conclusions: tariffs aren’t driving inflation, inflation is now running near the Fed’s target, and the data support a rate cut at the Fed’s January 28 meeting. Headline inflation came in as expected, core inflation was even cooler, and goods prices stayed flat—showing no tariff pass-through. Bottom line: inflation is stable, the justification for high rates is gone, and it’s time for the Fed to cut.