The Federal Reserve will remain cautious, as the CPI data and the government shutdown are closely timed

According to Jinshi News, Jeff Schulze, the Director of Economic and Market Strategy at ClearBridge Investments, stated that although investors will cheer for the December CPI report, viewing it as further evidence of cooling inflation, the Federal Reserve will remain in a wait-and-see mode due to the short time interval between the data and the government shutdown event, as well as the existing uncertainties. This report has positive implications for risk assets and increases the likelihood of the Federal Reserve providing additional monetary policy support in 2026.