Jake Obina, managing director and senior economist of Piper Sandler, broke the testimony of Powell, president of Fed before MPs, to deal with Federal Reserve inflation and government expense.
Inflation in January federal Reserve Weighs a continuous stagnation for its interest rate cut plans.
The Labor Department said on Wednesday that a comprehensive remedy of everyday goods such as consumer price index – gasoline, groceries and rent costs increased by 0.5% in January, while it increased by 3% on an annual basis. The annual figure is the highest since June 2024.
Both annual and titles CPI figures were hot compared to the estimates of economists voted by LSEG Estimated inflation will increase A monthly basis was 0.3% and 2.9% from a year ago, and more than 0.4% and more than 2.9% respectively than the reading of the previous month.
People shop at a grocery store in Rosemade, California on August 14, 2024. (Frederick J. Brown / AFP Getty Image / Getty Image)
The so -called core prices, which exclude more unstable measurements of gasoline and food to better assess the price increase trends, was 0.4% in January and 3.3% on an annual basis and was more warm than expected. LSEG economists estimated a monthly growth of 0.3% and an annual growth of 3.1%. Both figures were 0.1 percent more than the previous month.
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The report showed that inflation is under pressure American economy In the last two years, the 2% of the 2% target of the Federal Reserve should continue to remain continuously despite the progress in bringing inflation.
High inflation has arisen Severe financial pressure For most American homes, which are forced to pay more for everyday requirements such as food and rent. Price growth for low -income Americans is particularly difficult, as they spend more to their already stretched petchecs on requirements and have less flexibility to save money.
Cage-free eggs at CostCo Store in Florida. (Lindsay Nicolson/UCG/Universal Image Group Getty Image/Getty Image)
In the case of food, prices for eggs, frozen non-carbonated juices, bacon, beans, peas and lentils, as well as beef, wheel and latuus headline increased more than CPI.
Food prices
- Eggs: +53%
- Frozen non-carbonated juice: +7.7%
- Bacon: +6%
- Beans, peas, lentils: +5.6%
- Beef and Veal: +5.5%
- Latus: +3.3%
Source: BLS, CPI Index January 2025
Energy costs increased by 1.1% on monthly basis in January, slower than reading 2.4% in December. Last month, gas prices were 1.8%, while natural gas prices increased the same amount.
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Food prices rose 0.4% in January. The food index was 0.5% above the month, with an increase of 15.2% in the cost of the egg, about two-thirds of the total increase of the index. Fruits and vegetable prices helped offset some increase in the index, falling 0.5% for the month, while grains and bakery products also decreased by 0.4%.
Food away from the home index was 0.2% above in January. Prices for limited service food were 0.3% for the month, while the complete service food saw a small increase of 0.1%.
Housing prices rose 0.4% in January and the monthly CPI increased by about 30%. Compared to a year ago, the prices of shelters increase 4.4%, which the Labor Department noted is that the smallest is 12 months since January 2022.
The cost of transport rose by 1.8% in January and increased by 8% from a year ago. Automatic insurance Prices were an important contributor, from a year ago to January and 11.8% increased by 2%. The airline fare increased by 1.2% last month and increased by 7.1% a year ago.
Federal Reserve inflation stabilizes interest rates amid uncertainty
The data comes after the Federal Reserve announced a stagnation in its interest rate cut plans at the Central Bank meeting last month, leaving the benchmark Federal Funds rate at a target range of 4.25% to 4.5%. Fed chair Zerome poly Indicated that the policy makers are not in a hurry to cut interest rates and will also monitor the labor market figures along with reading of inflation as they weigh their next step.
Bill Adams said, “Some poor inflation prints of January were due to united factors, such as egg prices rise, as avian flu flows in the country’s agricultural industry, or the month’s cold snap and stringent sanctions on Russia Promotes, “Economists for Comerica Bank. “But other inflation pressure looks like businesses reset at the turn of the year to increase the expenses felt in 2024.”
“Fed January will see the hot inflation print of January as confirmation that the bubble continues under the price pressure Surface of the economy. This will strengthen the tilt of the fed in 2025 to reduce the least slow and possibly cut to the final rate. Fed is also looking at the effects of high tariffs, more restrictive immigration policies and tax cut plans. Adams stated that these policies can increase inflation because their effects are in their effects through the economy, which is higher than that keeps the fed interest rates higher.
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According to CME Fedwatch Tool, the markets reacted on January CPI print and increased the possibility of unchanging in the next policy meeting in March to 97.5% in the next policy meeting.
