Cathie Wood Says U.S. Economy May Enter Deflation Soon

ARK Invest CEO Cathie Wood ignited debate over the trajectory of U.S. inflation today after pointing to a sharp decline in real-time data from Truflation, an independent blockchain-based inflation index. 

Responding to a post on X, Wood said Truflation shows U.S. consumer price inflation is “already down to 1.4%,” adding that she believes it is “on its way to negative territory.”

Her comments arrive amid growing divergence between official government statistics, which still show inflation holding above 2%, and alternative real-time indicators that suggest price pressures may be cooling far faster than traditional measures reflect.

A Growing Gap Between Truflation and Official CPI

Truflation, which aggregates millions of data points daily and updates its index in real time, has recently reported readings between 1.2% and 1.7%. 

The company’s latest public dashboards show inflation hovering near 1.22%, well below the Federal Reserve’s 2% target and far beneath the 2.7% annual rate captured in the most recent Consumer Price Index.

The index credited declining shelter costs, especially within its owned-dwellings category, as the main driver of early-2026 disinflation. Its live feed has increasingly diverged from official Bureau of Labor Statistics (BLS) data, which rely on monthly surveys and lagging methodology.

Early 2026 Truflation numbers mark a sharp reversal from late 2025, when the platform’s readings climbed toward 2.7% year-on-year, raising concerns that inflation may have been re-accelerating. 

December CPI Shows Inflation Holding Steady

Wood’s remarks contrast sharply with the latest government data. 

According to the BLS, U.S. consumer inflation held steady at 2.7% in December, matching economists’ expectations and reinforcing the view that official inflation has remained stubborn across recent months.

Headline CPI rose 0.3% month-on-month, consistent with the pace recorded through late 2025. Core CPI, which strips out food and energy, rose 0.2% m/m and 2.6% over the past year, slightly cooler than expected but still well above Truflation’s real-time estimate.

Economists say the December print reflects a familiar pattern: goods prices have largely stabilized or fallen, while services categories remain sticky. Shelter, medical services, and transportation continue to hold overall CPI above target, even as more volatile components have normalized.

Fed Expected To Keep Interest Rate Steady at Next Meeting

The US Federal Reserve (Fed) will meet again on Jan. 27 - 28. The overall consensus among analysts is that the central bank will opt to leave interest rates unchanged between 3.50-3.75%.

On the prediction market platform Polymarket, traders see a 98% chance that the Fed will leave rates unchanged. 

Contract asking what the Fed’s next decision will be (Source: Polymarket)

They also see a 1.8% chance that the Fed will cut rates by 25 basis points.

Similarly, the CME FedWatch tool shows analysts believe there is a 95% chance that rates will remain unchanged, and 5% odds that there will be a 25 basis points cut.