January’s inflation reading was higher than anticipated, fueling worries that the Federal Reserve will escalate its efforts to lower prices.
The Consumer Price Index for January increased 6.4% when compared to the same month a year prior. The CPI is a highly monitored indicator of inflation that tracks changes in the prices of common goods and services.
The decrease made this the sixth month in a row that prices had decreased year over year.
But on a monthly basis, prices rose 0.5% over December, according to data released on Tuesday by the Bureau of Labor Statistics.
Core inflation was 5.6% year over year, a measure that does not include volatile food and energy prices.
Prior to the announcement of the January Consumer Price Index, experts predicted that inflation would increase by 6.2% on an annualized basis and by 0.4% from December to January.
Due to exorbitant grocery costs, rent, and utility costs, American households continue to experience considerable financial hardship. According to AAA, gas prices increased by 30 cents in January, making it more difficult for US drivers to fill up their tanks.
In their efforts to control prices, central bank officials have observed progress. Fed Chair Jerome Powell said earlier this month that the “dis-inflationary process has begun.” In June of last year, inflation reached a decades-high peak of 9.1%.
However, Powell and his colleagues raised the benchmark interest rate by another quarter percentage point at their most recent meeting and declared that “ongoing hikes” were still required to make sure that inflation reaches its desired goal of 2%.
In a speech earlier this month, Powell stated, “There has been an assumption that it will go away swiftly and painlessly.” “That’s not at all guaranteed,” I say.
According to CME Group data, the market is pricing in a 91% likelihood of another quarter-point increase in interest rates at the Fed’s upcoming meeting on March 21–22.
»Experts surprised as inflation rises again by 0.5%«
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