Strategist: CPI lower than expected may disrupt expectations of interest rate cuts.

Interest rate strategists Jersey and Hoffman pointed out that the market currently prices in that the CPI for the next 12 months will remain above 3%, and it will only start to decline in the middle of 2026. The consensus is that the Fed's interest rate cut expectations and inflation will eventually ease. Today's slightly lower than expected core CPI may prompt the market to reassess the pace and magnitude of interest rate cuts.