---
title: "U.S. core inflation annual rate hits a four-year low, market slightly increases bets on the Federal Reserve cutting interest rates in April"
description: "The annual inflation rate in the United States last month was 2.7%, and the core inflation rate rose to 2.6%, hitting a four-year low. Market expectations for the Federal Reserve to cut interest rates"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/272488593.md"
published_at: "2026-01-14T02:32:55.000Z"
---

# U.S. core inflation annual rate hits a four-year low, market slightly increases bets on the Federal Reserve cutting interest rates in April

> The annual inflation rate in the United States last month was 2.7%, and the core inflation rate rose to 2.6%, hitting a four-year low. Market expectations for the Federal Reserve to cut interest rates in April have slightly increased, with the probability rising from 38% to 40%. Nevertheless, the market generally expects the Federal Reserve to cut rates only in June. The unexpected decline in the unemployment rate has prompted several major banks to adjust their expectations for the Federal Reserve's rate cuts, with some institutions even predicting that the Federal Reserve will not cut rates this year and will resume rate hikes next year

U.S. inflation last month was 2.7%, in line with market expectations, but core inflation rose 0.2% year-on-year, slightly lower than expected, with an annual rate of 2.6%, the lowest in four years.

According to a report by Reuters, interest rate futures show that the market has increased expectations for the Federal Reserve to cut rates earlier, with the probability raised from 38% to about 40% for a cut in April this year. However, the market still generally expects the Federal Reserve to cut rates again in June this year, by which time current Chairman Jerome Powell will have left office.

The unexpected decline in the U.S. unemployment rate has prompted major banks to adjust their expectations for Federal Reserve rate cuts. Morgan Stanley, Barclays, and Citigroup have all delayed their predictions for the Federal Reserve's rate hikes this year, with JP Morgan even predicting that the Federal Reserve will not cut rates this year and will resume rate hikes next year

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.