More than expected, inflation increased in January in the US, providing another argument to the Fed not to rush to reduce interest rates.
The Consumer Price Index (DBC) accelerated 0.5% for the month, with the result that the annual rate of inflation was 3%. Dow Jones’ corresponding estimates were 0.3% and 2.9% respectively.
Except for the volatile prices of food and energy, the structural ID increased by 0.4% per month, placing the 12 -month inflation rate to 3.3%. The corresponding estimates were 0.3% and 3.1%.
Roof and food
Housing costs continued to be a problem for inflation, as it increased by 0.4% per month and accounts for about 30% of the total growth, according to BLS.
Food prices rose by 0.4%, driven by an increase in egg prices by 15.2% associated with ongoing bird flu problems, which forced farmers to destroy millions of chickens. This is the highest increase in egg prices since June 2015 and is responsible for about two -thirds of increasing food prices inside. Egg prices have been launched by 53% in the last year.
Markets have fallen after the news, with the future fulfillment contracts linked to the Dow Jones industrial average sliding more than 400 points, while bond yields jumped. The ten -year yield was reinforced by 10 basis points to 4,643%.
The fed
Fed President Jerome Powell, speaking in the established testimony to the Senate Banking Committee, explained that “inflation was a little longer last year”, adding that “recent progress was abnormal”.
Inflation remains above the target of 2% of the US Central Bank. The chances of reducing interest rates this year are declining amid growing uncertainty about the economic impacts of the Trump government’s commercial, migration and budget policies.
Consumer annual expectations for inflation have jumped to a high 15 -month -old in early February, as households realize that “it may be too late to avoid the negative impact of tariff policy”, a research by the University of Michigan University shows.
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