December's inflation numbers just landed, and the data tells an interesting story for markets. Year-over-year CPI came in at 2.7%, matching expectations exactly. But here's where it gets nuanced: core CPI actually printed lower than forecast, landing at 2.6% versus the anticipated 2.7%. That's the kind of soft reading that typically gets traders' attention.

On the monthly side, both metrics came in lighter than expected. Month-over-month CPI was 0.3% (as expected), while core CPI surprised to the downside at 0.2% instead of the projected 0.3%. These cooler core readings suggest underlying inflation pressures are gradually unwinding—exactly what policymakers want to see. For anyone tracking Fed policy implications and portfolio positioning, this backdrop of moderating price pressures could signal shifts in upcoming rate expectations.