US inflation slowed less than markets expected. Stocks reacted very positively to the data within a few hours and bond yields fell sharply. The S&P 500 index rose as the Fed's monetary policy was close to a turnaround, while some economists pointed to data distortions and structural pressures in core prices. Despite fundamentally positive data, there is tension in the equity markets. Where will prices go by the end of the year?

Inflation in the US from June 2023

The US inflation data released yesterday (18 December 2025) triggered exactly the type of chain reaction in the markets that has decided everything in the last two years: bond yields, the dollar and valuations of technology companies.

The CPI for November 2025 revealed significantly better data than expected, and the market responded with rising stocks and falling yields. But there is a fundamental problem in the background: economists and parts of the market are not sure how true this data is. The US government has gone through…