US Inflation and Federal Reserve Policy💱 Forex•USD/JPY

US Inflation Cools, Fuels Fed Rate Cut Bets & Dollar Weakness

February 14, 2026, 12:01 PM165 words10 sources
USD/JPY
US Inflation Cools, Fuels Fed Rate Cut Bets & Dollar Weakness

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Recent US economic data indicates a continued cooling of inflation, prompting increased expectations of potential Federal Reserve interest rate cuts. January’s Consumer Price Index (CPI) came in below expectations at 2.4% year-over-year and 0.2% month-over-month, weakening the US Dollar and boosting the Euro and British Pound. Core CPI, excluding food and energy, largely met forecasts, but the overall trend supports a more dovish Fed stance. Market pricing now reflects around 61 basis points of Fed rate cuts in 2026. While stronger-than-expected jobs data offered temporary USD support, the softer CPI data outweighed this. Fed officials, including Austan Goolsbee, acknowledge potential rate cuts but emphasize the need for further progress in taming services inflation. The Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, is a key upcoming event. A landslide victory for Japan's Prime Minister Sanae Takaichi also contributed to Yen strength. Analysts at MUFG suggest the dollar may find firmer footing before the PCE release, but tariff rollbacks could further weaken the currency.

Source Articles

This article is based on analysis of 10 source articles from our news database.

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    Rehana William |Financial Consultant _Forex_Gold Xauusd| Fund Manager··bestliveforexcomexrecommendationsprovider.wordpress.com·
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