📊Economists Expect G10 Inflation to Slowdown This Year: Cable FX Macro

**As seen in Online Tools>Inflation Monitor, subscribe at cablefxm.co.uk

• In the U.S., headline CPI slowed to 2.4% y/y in January 2026 (down from 2.7% in December 2025), the lowest since mid-2025. Core CPI eased to around 2.5%. This reflects base effects, softer energy, and some shelter moderation, supporting expectations of gradual Fed policy normalization. Across the pond, HICP dropped to 1.7% y/y in January 2026 (from 2.0% in December 2025), the lowest in over a year, driven by sharp energy deflation (-4.1%). Core inflation dipped to 2.2%. This has reinforced ECB caution on further easing.

• IMF and other forecasts suggest a continued decline in global inflation, decreasing from approximately 4.1% in 2025 to around 3.8% in 2026, with G10 averages likely stabilizing at or below 2%. US inflation is expected to average about 2.4%, with a gradual return to target levels. Many European and Asian G10 nations anticipate inflation below 2%, while those sensitive to commodities, such as Norway, may face upward risks from energy prices. Central banks are diverging in their approaches: the Fed is likely to ease slightly, while the ECB and BoE remain cautious or on hold, and the RBA and RBNZ may either hike rates or pause. Meanwhile, the BoJ is moving towards gradual normalization. This scenario supports a "soft landing" narrative, although risks from geopolitical tensions, trade policies, or renewed energy shocks could potentially reignite pressures in the first half of 2026.