U.S. Inflation Report Looms as Credit Card Debt Hits Record Levels
By John Nada·Feb 12, 2026·4 min read
As U.S. credit card debt reaches a record $1.28 trillion, the upcoming CPI report is set to influence inflation expectations and gold prices significantly.
Investors are bracing for the upcoming U.S. Consumer Price Index (CPI) report, which could significantly influence both inflation expectations and gold prices. Economists predict a cooling in inflation for January, with headline figures estimated at 2.5% year-over-year, down from 2.7% in December. Such a decline would mark the lowest inflation rate in nearly five years, and core CPI is also expected to align with these figures, reflecting easing price pressures in certain sectors.
The significance of the CPI report extends beyond mere numbers. For the Federal Reserve, a softer inflation reading could solidify the current 'wait-and-see' approach regarding interest rates, as markets are not anticipating immediate cuts. However, the broader economic landscape presents a complex scenario. While cooling inflation might temper short-term demand for gold, long-term factors such as government borrowing and geopolitical tensions continue to buttress the appeal of hard assets.
Compounding these dynamics, U.S. credit card debt surged to a record $1.28 trillion in the fourth quarter of 2025, highlighting increasing reliance on credit amid persistent inflation and high-interest rates. This rise, amounting to an increase of roughly $44 billion in just three months, underscores financial strain among consumers, particularly among younger and lower-income groups. The Federal Reserve Bank of New York's report indicates that balances rose for another quarter, reflecting a troubling trend of households leaning on credit for essential purchases as inflation persists.
Delinquency rates have also seen an uptick, particularly among younger and lower-income borrowers, indicating that financial strain is not evenly distributed across demographics. This situation reinforces the notion of a “K-shaped” recovery, where wealthier households may be recovering while more vulnerable consumers face mounting challenges. If borrowing costs remain elevated, servicing this growing debt could crowd out discretionary spending, leading to a potential slowdown in economic growth which is heavily reliant on consumer expenditure.
The recent uptick in gold prices came as a result of a stronger-than-expected jobs report, which dampened immediate expectations for Federal Reserve rate cuts. Higher Treasury yields and a strengthened dollar typically act as headwinds for gold, diminishing its allure as a non-yielding asset. Despite this, the fundamental backdrop remains unchanged, with sticky inflation, increasing government borrowing, and continuing geopolitical risks shaping market behavior. Investors are keenly aware that strong economic data can delay rate cuts, but it can also exacerbate inflationary pressures.
Moreover, copper prices have seen a modest rise, reflecting robust demand expectations driven by global manufacturing resilience, particularly in Asia. Market participants are optimistic about demand from sectors like electrification and green energy, while structural supply constraints continue to limit output. As traders maintain a positive outlook, the expectation is that industrial demand will remain steady, notwithstanding tighter financial conditions. This intersection of demand and supply dynamics in the metals market is critical, as it will influence investment strategies in commodities.
In the energy sector, President Trump’s recent directive to prioritize coal purchases for military bases underscores an aggressive push towards fossil fuels. This move, backed by a $175 million allocation for facility upgrades, raises questions about the long-term energy economics in the U.S. While energy policy changes may not have immediate market impacts, they could reshape investment incentives in the energy landscape. The White House's push for “clean coal” contrasts sharply with scientific consensus on the environmental impact of coal, highlighting the ongoing debate over energy sources amid climate change concerns.
As the situation evolves, the interplay between energy policy, inflation, and consumer behavior will be critical to watch. The potential shift towards coal reflects broader governmental priorities that could have long-term implications for energy costs and national security. Investors will need to consider how these policies affect not only energy markets but also the broader economic landscape, including inflation.