US export prices rose 0.3% month over month in December. This was above the 0.1% forecast.
This result shows export prices rose faster than expected. The report compares the actual figure (0.3%) with the forecast (0.1%).
Export Prices Signal Persistent Inflation
The 0.3% rise in the December 2025 export price index was higher than expected. It was an early sign that inflation could stay persistent. The data suggested strong global demand for U.S. goods and showed that price pressures were easing more slowly than many hoped. This helped set a cautious market tone going into the new year.
More recent data has supported this view. The January Consumer Price Index showed inflation picked up again, rising 0.4% month over month. The latest jobs report also showed the unemployment rate holding at a low 3.6%. Together, these numbers suggest the inflation pressures seen in late 2025 were not a one-off, but part of an ongoing trend.
As a result, markets are quickly adjusting expectations for Federal Reserve policy. Fed funds futures now point to a later first rate cut. The probability of a May cut has fallen below 40%, down from above 80% a month ago. This mirrors what happened in 2023, when sticky data pushed the Fed to stay hawkish longer than markets expected.
For traders, this points to a stronger U.S. dollar and interest rates staying higher for longer. Consider long exposure to the dollar index (DXY). Also consider buying puts or taking short positions in long-duration Treasury bond ETFs. The 10-year Treasury yield has already moved back above 4.35%, and it may have further to rise.
This backdrop can also weigh on rate-sensitive sectors such as technology and other growth stocks. Protective puts on indices like the Nasdaq 100 can help hedge against a potential decline, since borrowing costs are now expected to stay elevated. With uncertainty rising, call options on the VIX may also help if market volatility increases.
Implications For Risk Assets
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