The U.S. Import Price Index rose 0.1% month over month in December. That was below the 0.2% forecast.
This result suggests import prices rose more slowly than expected. The release did not include further details.
Looking back at December 2025, the import price index increased just 0.1%, also below the 0.2% estimate. This suggests imported inflation was cooling more than expected at the end of last year. On its own, this data point supports the idea that overall price pressures in the economy are easing.
More recent data also points to disinflation. In January 2026, the latest CPI report showed core inflation slowed to a 2.8% annual rate, the lowest since early 2023. Fed funds futures now price a 70% chance of a rate cut by the Federal Reserve’s July meeting. In response, we are looking at call options on interest rate futures, which would benefit if rates fall in the coming months.
In equities, this outlook supports index-based strategies, since lower interest rates often lift stock valuations. We are positioning for this by buying S&P 500 call options that expire in the second quarter. This mirrors what we saw in late 2023, when early signs of a Fed pivot helped drive a strong market rally.
A less aggressive Federal Reserve could also push the U.S. dollar lower. The Dollar Index (DXY) has already fallen 1.5% since the start of the month. We expect that trend to continue. That makes trades that benefit from a weaker dollar worth considering, such as call options on the euro or Japanese yen.
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