The United States inflation continues to resist the last mile to the 2%price stability objective. Prices rose 3.0% year -on -year until January, according to data published on Wednesday after a monthly price increase of 0.5%, largely due to the rise in the price of eggs. That is an increase compared to 2.9% of December. In addition, pressures and uncertainties derived from supply restrictions on Donald Trump, such as tariffs or immigrants deportation, converge. In that context, the Federal Reserve has paused in the type sales that will last foreseeably in the monetary policy meeting of the Central Bank on March 19.
Inflation was right at 3.0% in June last year. Since then, it was reduced to a minimum of 2.4% in June, but then it has retreated all the advanced path towards the 2% price stability objective. The monthly rise of 0.5% of January exceeds the forecasts of analysts and is the largest since August 2023. It has caused a drop in the stock market.
Donald Trump said in campaign that, with him as president, prices would go down the first day. High inflation, a global phenomenon, took its toll on Democrats in the elections on November 5. However, once he has returned to the White House, Trump meets the difficulties of going back the prices and limitations of his competences in the matter. Its strategy is to boost oil production, but for now the price of crude have barely dropped.
In addition, there are factors, such as aviar flu, which are promoting food prices. The eggs took 15.2% in January, the largest monthly increase in almost 10 years. That increase was responsible to its greater extent for the increase for 0.4% of food for home consumption. In a year, the price of eggs has already risen 53%. In some restaurants, such as the Waffle House breakfast chain, they charge a 50 cents per egg in the menu and in supermarkets there are product shortage. Sometimes, the amount to be bought for each customer is limited.
They are not just eggs. In addition to food, energy is more than 1.1% monthly due to the rise in gasoline prices, mainly. Along with that, the underlying inflation, which does not include food or energy, was 0.4% monthly and 3.3% year -on -year in January.
Powell rejects Trump’s pressures
The president of the Federal Reserve, Jerome Powell, said Tuesday in an appearance in the Senate “we are in a fairly good situation with this economy. We want to advance more in inflation. And we believe that our official interest rate is in a good place, and we do not see any reason to hurry to reduce it even more, ”said Powell, giving Wednesday, in the House of Representatives, has reiterated it.
The Central Bank made an uncertain pause in January after three consecutive cuts that in total reduced the price of money since September. Investors only give a single additional cut of 0.25 points in all 2024, already in the second half of the year.
Trump has again advocated Wednesday through Truth, his social network, for cuts in the price of money. “Interest rates should be lowered, something that would go hand in hand with the next tariffs !!!”, has written, in what would probably gasoline for inflation.
In his appearance on Wednesday in the House of Representatives, Powell has assured that he will not be influenced by the pressures. “People may be sure that we will continue working, doing our job and making our decisions based on what is happening in the economy,” he answered questions from congressmen.
