Bankinter | December inflation was in line with expectations. Core inflation surprised on the upside. Positive reading. CPI remained at 2.7%, as expected. Core inflation, which excludes the most volatile elements of the indicator (fresh food and energy), surprised on the upside, remaining at 2.6% (versus 2.7% expected). By component, petrol was the item that recorded the largest fall within the indicator (a drop of 3.4% year-on-year), while food (up3.1%) and electricity & gas (7.7%) were the items that rebounded the most.
Bankinter analysis team’s view: Good for the market. However, the impact was quite limited, because the figures are somewhat distorted by the US government shutdown. We will have to wait for the January figures to confirm that inflation is indeed moving away from 3%.
In any case, the price level in the United States appears to be contained, which provides further grounds for believing that the Fed will continue to cut interest rates. In this context, we maintain our estimate of up to three rate cuts in 2026, ending the year at levels of 2.75%/3.00%.
