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US Inflations Worsens in Jan 02/12 07:50
WASHINGTON (AP) -- U.S. inflation accelerated last month as the cost of
groceries, gas, and used cars rose, a trend that will likely underscore the
Federal Reserve's resolve to delay any further interest rate cuts.
The consumer price index increased 3% in January from a year ago,
Wednesday's report from the Labor Department showed, up from 2.9% the previous
month. It has increased from a 3 1/2 year low of 2.4% in September.
The figures underscore the stickiness of inflation, which created a major
political problem for former President Joe Biden. President Donald Trump
pledged to reduce prices in last year's campaign, though most economists worry
that his many proposed tariffs could at least temporarily increase costs.
Later Wednesday, Federal Reserve Chair Jerome Powell will testify before the
House Financial Services Committee, where he will likely be asked about
inflation and the Fed's response to it. The Fed raised its benchmark rate in
2022 and 2023 to a two-decade high of 5.3% to combat inflation. With inflation
down significantly from its 9.1% peak in June 2022, it cut its rate to about
4.3% in its final three meetings last year.
Fed officials are mostly confident that inflation over time will head lower,
but they want to see further evidence that it is declining before cutting their
key rate any further. The Fed's rate typically influences other borrowing costs
for things like mortgages, auto loans, and credit cards.
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