Cooling U.S. Inflation Steadies Rate Bets as Tariff Moves and Fed Probe Stir Markets

Overview

• U.S. CPI rose 0.3% in December and 2.7% year over year, with core up 0.2% on the month and 2.6% annually, and traders now fully price a cut by June.
• Wall Street slipped as the Fed’s Beige Book flagged moderate price growth and widespread tariff cost pressures, while November PPI increased 0.2% and 3.0% year over year.
• President Donald Trump announced an immediate 25% tariff on countries that do business with Iran, adding to uncertainty over global trade.
• The U.S. Treasury said the Q4 2025 budget deficit fell 15% to $602 billion, helped by higher tax and tariff receipts.
• In Brazil, November services fell 0.1% after nine months of gains, the World Bank cut 2026 growth to 2.0%, the real hovered near R$5.37–R$5.40, short-term rates eased, and local markets tracked an election poll and a new Police Federal phase involving Banco Master.