Today’s CPI report looks like good news on the surface, but the context is what matters.

Headline CPI came in at 0.2% for the month. Year over year, inflation dropped from 2.7% to 2.4%. Core inflation eased too. The big piece underneath that is shelter costs, which have been one of the largest drivers of inflation over the last two years, and they continue to cool.

Now here’s where it gets interesting.

When Biden left office in January 2025, inflation was falling and sitting around 2.7% year over year. That was well down from the peak, but still above the Fed’s 2% target.

After “Liberation Day” in early April 2025, inflation bottomed out at 2.3%. Then it ticked up under Trump, reaching about 3.0% by September.

The nuance people miss is that some of the deceleration we’ve seen recently is coming from categories like housing that have a long lag time. Shelter does not turn quickly. It is one of the slower moving parts of inflation. As it cools, it can pull the overall inflation trend down even if other categories are noisy month to month.

Now I’m curious what you think. Does this feel like inflation is trending up again, staying steady, or gradually cooling? And on tariffs, do you think they are adding to inflation, or slowing demand enough to create broader deceleration in the economy?

Bottom line, as a loan officer I’m watching two things: shelter costs and jobs. If shelter keeps cooling and job creation stays slow, that combination can support lower mortgage rates. That is what matters most for buyers and homeowners right now.v