CPI January 2025:

Inflation increased more than expected in January, providing more incentives for the Federal Reserve to maintain the line of interest rates.

He Consumer Price IndexA wide measure of costs in goods and services throughout the economy of the United States, accelerated 0.5% adjusted seasonally for the month, which put the annual inflation rate at 3%, the Office of Labor Statistics reported Wednesday. They were higher than the respective estimates of Dow Jones for 0.3% and 2.9%. The annual rate was 0.1 higher percentage points than in December.

Excluding volatile food and energy prices, the CPI increased 0.4% in the month, which puts the inflation rate of 12 months by 3.3%. Than compared to the respective estimates for 0.3% and 3.1%. The annual central rate also increased 0.1 percentage since December.

The markets fell after the news, with futures linked to the industrial average Dow Jones sliding more than 400 points, while bond yields increased very high.

“The Fed ‘Wait and See’ Fed will be waiting for more time than expected after an inflation report from January to Red Vivo,” wrote Josh Jammer, an investment strategies analyst at Clearbridge Investments. “This report places the final nail on the coffin for the speed cut cycle, which we believe is over.”

The costs of the shelter continued to be a problem for inflation, the 0.4% increase in the month and representing approximately 30% of the total increase, said the BLS. Within the category, a metric in which the owners estimate what they could obtain if they rent their homes increased 0.3% in the month and increased 4.6% per year.

“Refugio costs continue to be the main driver of central inflation, since higher mortgage rates lead more Americans to a rental market in which vacancy rates are almost recorded,” said Erik Norland, chief economist of CME Group. “Merchants seem to believe that today’s data cause additional Fed cuts to be less likely than they expected previously.”

Food prices increased 0.4%, driven by a 15.2% increase in egg prices related to continuous problems with flu flu to flu that have forced farmers to destroy millions of chickens . The office said it was the greatest increase in egg prices since June 2015 and was responsible for approximately two thirds of the increase in food at housing prices. Egg prices have shot 53% during the past year.

Non -alcoholic beverages recorded a gain of 2.2%, while tomatoes fell by 2%and other fresh vegetables decreased 2.6%.

The new vehicle prices were flat, but used cars and trucks saw an increase of 2.2%and motor vehicle insurance increased by 2%, which led the annual increase to 11.8%. Energy prices rose 1.1% as gasoline prices increased by 1.8%.

The report comes a day after the Fed president, Jerome Powell, indicated that the Central Bank could be waiting for a while when it comes to interest rates. Powell told the members of the Senate Banking Committee that he believes that Fed does not need to have a hurry for lower rates, since he evaluates progress in inflation and that President Donald Trump continues to plan to impose tariffs against imports.

The markets expect to a large extent that the Fed remains on hold for a long time and promoted the following rate of rate cut until September after the IPC report, according to the CME group data. Merchants also implied a probability of around 70% that the Fed only reduces once this year.

However, Trump is still pressing for lower rates. In a publication about Truth Social approximately half an hour before the launch of the CPI, the president said that “interest rates must be lowered, something that would go hand in hand with the next tariffs!”

However, the launch of the CPI could complicate greater flexibility in monetary policy.

The prices jump was made in workers’ payment checks, since the CPI increases completely compensated for the 0.5% higher movement in average average earnings per hour, said the BLS in a separate statement.