{"id":99129,"date":"2025-10-26T15:46:10","date_gmt":"2025-10-26T15:46:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/99129\/"},"modified":"2025-10-26T15:46:10","modified_gmt":"2025-10-26T15:46:10","slug":"markets-cheered-the-cpi-print-but-main-street-isnt-feeling-the-relief","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/99129\/","title":{"rendered":"Markets cheered the CPI print \u2014 but Main Street isn\u2019t feeling the relief"},"content":{"rendered":"\n

Stocks rallied on Friday <\/a>after September\u2019s inflation report came in slightly better than expected<\/a>. But on Main Street, the relief is harder to find.<\/p>\n

The headline Consumer Price Index rose 3% from a year earlier, a tenth of a percentage point below estimates, giving the Fed some breathing room<\/a> to press ahead with another rate cut next week. Core inflation eased to 3% year over year from 3.1% in August, the kind of progress policymakers and investors have been waiting for as signs emerge that price pressures in stubborn categories like housing and core services are finally starting to cool.<\/p>\n

Read more: How jobs, inflation, and the Fed are all related<\/a><\/p>\n

Still, economists urged caution on the optimism.<\/p>\n

\u201cThe numbers are better than expected, but still well above the Fed\u2019s target<\/a>,\u201d said George Bory, chief investment strategist for fixed income at Allspring Global Investments. \u201cIt\u2019s a little premature to signal the all-clear.\u201d<\/p>\n

\"U.S. U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C. Sept. 17, 2025. (Photo by Hu Yousong\/Xinhua via Getty Images) \u00b7 Xinhua News Agency via Getty Images <\/p>\n

One reason why: While the market cheered the headline number coming in below expectations, the broader inflation picture remains uneven.<\/p>\n

“Housing, shelter, and food all increased at a little bit slower pace than what we had penciled in, so it\u2019s looking a little bit better,” Joe Brusuelas, chief economist at RSM, told Yahoo Finance. “But make no mistake about it, we\u2019re still seeing services advance at a 3.6% year-over-year basis. Food is at a 3% year-over-year basis, and even transportation, which was down, is stuck at 1.7%.”<\/p>\n

In other words, that optimism on Wall Street doesn\u2019t match the reality on Main Street, particularly for lower-income consumers.<\/p>\n

\u201cOut there down-market, they\u2019re going to be looking at this and saying, guys, you\u2019ve lost your minds,” Brusuelas said. “Do you know what\u2019s happening down-market to our cost of living? It\u2019s rising.”<\/p>\n

That disconnect is visible in the details. Beef and veal prices are up nearly 14% from a year ago, natural gas has climbed 8%, and electricity is up 5%. So while core inflation shows progress, households are still paying more for essentials.<\/p>\n

\u201cWall Street gets very happy about low rates and liquidity,\u201d Brusuelas added, \u201cbut out there, people are watching their grocery and utility bills rise.\u201d<\/p>\n

And even with inflation moderating in certain categories, the Fed\u2019s path forward is anything but clear.<\/p>\n

\"Markets Markets may be celebrating cooler-than-expected inflation, but for many Americans still facing higher grocery, energy, and housing costs, the relief hasn\u2019t arrived. (Photo by Frederic J. BROWN \/ AFP) \u00b7 FREDERIC J. BROWN via Getty Images <\/p>\n

StoneX senior adviser Jon Hilsenrath noted that the central bank may have to make critical decisions with limited visibility as the ongoing government shutdown<\/a> stalls most major data releases.<\/p>\n

The CPI report, one of the few releases published during the shutdown after the Bureau of Labor Statistics recalled workers to complete it for Social Security calculations, offered the first clear read on the economy in weeks.<\/p>\n

\u201cThe market right now is convinced the Fed is going to proceed with the plan in the absence of data,\u201d Hilsenrath told Yahoo Finance. \u201cI think some people at the Fed are saying, wait a second \u2014 maybe we should actually [hold back and see how things play out.] It\u2019s kind of like driving in the snow when you can\u2019t see out the windshield. How fast do you want to drive when you can\u2019t see what\u2019s coming at you?\u201d<\/p>\n

That uncertainty adds to the disconnect between financial markets and everyday realities. With policymakers flying partly blind, the economy is moving on two tracks<\/a>: One driven by wealth and stock gains, the other weighed down by rising costs and tighter budgets.<\/p>\n

Coresight Research CEO Deborah Weinswig recently described the backdrop as \u201cthe highest level of bifurcation since early 2020,\u201d <\/a>with luxury shoppers still spending freely, even as middle- and low-income consumers cut back.<\/p>\n

For policymakers, that divergence complicates the path ahead. Inflation may be moving in the right direction, but the slowdown in price increases isn\u2019t felt evenly. The Fed\u2019s rate cuts may ease borrowing costs for businesses and markets, yet for many families, higher prices for food, housing, and energy remain front and center.<\/p>\n

Allie Canal<\/a> is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal<\/a>, LinkedIn<\/a>,<\/a> and email her at alexandra.canal@yahoofinance.com.<\/p>\n

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