Atlanta Fed Data Shows Persistent US Inflation
The latest report on the Atlanta Fed’s Sticky Consumer Price Index (CPI) indicates that inflationary pressures persist in the U.S. economy. The data shows that prices for core goods and services that change infrequently remain elevated. This macroeconomic backdrop could influence the Federal Reserve's decisions on interest rates and impact risk-on assets like cryptocurrencies.
- The Atlanta Fed's latest data from January 2026 showed the Sticky CPI rose 4.4% on an annualized basis and 3.0% on a year-over-year basis. The core version, which excludes food and energy, increased by 4.6% annualized. - The "sticky" price category is composed of goods and services that change price infrequently, on average less often than every 4.3 months. These items, which include categories like medical care, education, and housing, make up approximately 70% of the overall CPI basket. - In contrast, the Atlanta Fed's "Flexible CPI," which tracks prices that change more frequently like gasoline and food, decreased by an annualized 4.5% in January. This divergence highlights that underlying, slower-moving price pressures remain even as more volatile components see relief. - The Federal Reserve's Federal Open Market Committee (FOMC) held the federal funds rate in a target range of 3.5% to 3.75% during its January 2026 meeting, stating that inflation remains "somewhat elevated." The Fed's long-term inflation target is 2%. - Other measures of underlying inflation also remain above the Fed's target. The Federal Reserve Bank of Cleveland's Median CPI, which looks at the middle price change among all components, showed a year-over-year increase of 3.0% in January 2026. - While the headline Consumer Price Index (CPI) for January cooled to a 2.4% annual pace, persistent inflation in core services is a key factor keeping measures like the Sticky CPI elevated. - Persistent inflation metrics give the Federal Reserve reason to maintain a cautious monetary policy stance. A "higher-for-longer" interest rate environment generally increases borrowing costs and can dampen investor appetite for risk-on assets.
