Inflation in the United States suddenly rose in January, in a turn of events one Federal Reserve Bank president called "sobering."
That's the latest news from the Bureau of Labor Statistics, who shared their Consumer Price Index report on Wednesday. The latest update showed that inflation rose to 3 percent in January — a leap of 0.5% and the fastest monthly increase since August 2023 — after many common household goods soared in price. This came as an unpleasant surprise to economists, who were expecting an unremarkable January report.
Grocery prices were up by 0.5% compared to December, with a nationwide outbreak of bird flu being the likely culprit. The average price of a dozen Grade A eggs reached a new record high last month as farmers have been forced to liquidate their flocks.
Gasoline prices also rose by 1.8 percent, alongside other increases such as airline fares, hotel rates, used vehicles and automobile insurance rates.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, told the New York Times that the report is no reason to panic, but might push the Fed to change course if January is the start of a trend.
“There’s no question, if we got multiple months like this, then the job is clearly not done,” he said.
All of this complicates matters for the Fed, as rising inflation would traditionally keep the central bank from cutting interest rates. However, President Donald Trump has pushed to slash interest in his second term.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!!” Trump posted on Truth Social on Wednesday. “Let's Rock and Roll, America!!”
John Williams, president of the Federal Reserve Bank of New York, said in a speech on Tuesday that he still expected the U.S. to progress toward a 2 percent inflation goal — though he added that it “will take time before we can achieve that target on a sustained basis.”
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