Rate Cuts Should Follow
By Peter Navarro | RealClearMarkets | February 13, 2026
Headline consumer prices rose just 0.17 percent for the month, pulling year-over-year inflation down to 2.4 percent. Core inflation came in contained at 0.30 percent for January and 2.5 percent over the past year. For business leaders and investors focused on trajectory rather than noise, the direction is unmistakable: price pressures continue to ease while growth remains intact.
That supply side mix changes the policy calculus—and once again reminds the Fed it is waiting too long to further cut rates.
Energy again did much of the heavy lifting. Prices fell 1.5 percent in January, led by a meaningful drop in gasoline. Energy is the transmission mechanism of inflation—affecting transportation, food production, manufacturing inputs, and services. When domestic supply expands and price pressures ease at the source, the disinflationary effects ripple outward. That is now visible in the data.
The tariff inflation narrative also took another hit.
Core goods prices were flat in January and are running just over one percent year-over-year. If tariffs were inherently inflationary, the evidence would show up first in import-heavy consumer goods. It does not.
The data continue to debunk the claim that trade enforcement automatically translates into higher consumer prices. Instead, supply chains are stabilizing, domestic production is strengthening, and goods inflation remains contained. The globalist spin does not survive contact with the arithmetic.