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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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