US January Inflation Accelerates
Analysis based on 7 articles · First reported Feb 12, 2025 · Last updated Feb 12, 2025
The acceleration of inflation in the United States, driven by rising costs of groceries, gas, and used cars, is likely to cause the United States — Federal Reserve to delay further interest rate cuts, leading to higher borrowing costs. This unexpected boost in inflation could dampen business enthusiasm and lead to a sell-off in major markets, as indicated by Dow futures tumbling 400 points.
U.S. inflation accelerated in January, with the consumer price index rising 3% from a year ago, up from 2.9% the previous month. Core consumer prices, excluding food and energy, also increased. This uptick in inflation, driven by higher costs for groceries (including a 15.2% surge in egg prices due to an avian flu epidemic), gasoline, used cars, car insurance, and hotels, has remained stubbornly above the United States — Federal Reserve's 2% target. As a result, the United States — Federal Reserve is expected to delay further interest rate cuts, maintaining its benchmark rate at a two-decade high. United States — Federal Reserve Chair Jerome Powell will testify before Congress regarding this development. Former President Joe Biden faced political challenges due to elevated prices, while President Donald Trump's proposed tariffs on steel and aluminum imports are anticipated by economists at Goldman Sachs to further increase inflation, potentially limiting the United States — Federal Reserve's ability to cut rates.
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