US Inflation Slows to 2.4% as Strong Labor Market Keeps Fed Rates on Hold

US consumer price inflation eased to 2.4% in the 12 months through January, falling more sharply than market participants had anticipated. While the headline figure showed significant cooling, underlying price pressures remain persistent, complicating the inflation outlook. A robust labor market has further reinforced expectations that the Federal Reserve will maintain interest rates at their current levels for the time being. The combination of sticky core prices and employment strength suggests that a pivot to rate cuts is not yet on the immediate horizon. Market reactions have been mixed as investors weigh the positive inflation trajectory against the prospect of 'higher for longer' rates. Consequently, instruments such as the USD and US10Y Treasury yields are seeing increased volatility as the Fed's next moves remain data-dependent.