US consumer prices rise faster than expected in January in a sign of inflation progress can remain stopped, data shows on Wednesday, when the Chairman of Federal Reserve Jerome Powell headed to the congress for the second day of testimony.
Increasing prices for housing, food and energy, with sharp increases also for used cars, pushing the consumer price index rose at an annual level of 3% in January versus 2.9% the previous month.
The change is slightly above the expectations of the analyst, and is likely to increase the reluctance of Fed to cut interest rates further because policy makers are waiting for signs that price pressure in the economy will continue to subside.
Leap in consumer staples, with gas prices rose 1.8% for a month and food at home rose half the percentage point, can also feed public expectations about inflation felt by The Fed is important to be controlled.
Consumer headline inflation has now increased four months in a row, encouraging traders to bet the Fed will not cut the level of benchmark policy again until September, and now hopes it will be a reduction this year.
President Donald Trump on social media once again calls for lower interest rates to “join hands” with the increase in tariffs he has worn and is planning, repeated comments said by Minister of Finance Scott Bescent is intended to refer to the results of long-term bonds not Fed policy .
But long -term tariffs also jumped on inflation news, with the results on the Treasury not 10 years, an increase of around 10 basis points to 4.6%.
Powell appeared today before the DPR’s Financial Services Committee at 10 am EST (1500 GMT) and will usually repeat the same opening statement delivered in the Tuesday session before the Senate Banking Committee.
Inflation has been a major concern of the central bank since it began to surge in 2021 to the highest level since the 1980s and encouraged Fed to approve a series of rapid interest rates.
Inflation since then returned to the target of 2% of the central bank. But after starting to cut the interest rates last year, Fed had since moved to the sidelines with policy makers said they were ready to survive until inflation continued to decline and they gained more clarity about the direction of the economy under the new Trump government.
“We don’t need to be in a hurry,” Powell told the Senate Banking Committee at the Tuesday session.
The session deviated far beyond the monetary policy when parliamentary members asked Powell about their views on the tariff given the import tax launched by Trump, the integrity of the US treasury payment system, and the state of separate agents, the consumer financial protection agency, that it was that the consumer financial protection agency, that Consumer Protection Bureau, that consumers, consumer financial bureaus, that, consumers, can be eliminated by new government.
Source: Reuters
