Egg prices rose more than 15 % in January. (Warehouse)
The annual inflation has risen to 3 % in January, higher than expectations and further reason for the Federal Reserve is more reason to reduce interest rates.
Inflation increased by 0.5 % per month, slightly over expectations and above Increase of last month 0.4 %According to the Consumer Price Index (CPI) Published by the Office of Labor Statistics (Bls). The CPI kernel, which excludes food and energy, increased by 0.4 % in January and increased at the same level as December. This raised the rate last year to 3.3 %.
The costs of the shelter increased by 0.4 % and the most important role in the monthly increase was in January and accounted for nearly 30 % of the monthly increase in all cases. Gas had grown by 1.8 % during the month. Food prices are rising and rose 0.4 % last month. The food index at home has increased by 0.5 %, which is primarily increased by an increase in egg costs, which increased by 15.2 % in January.
“The unexpected acceleration in inflation is the third consecutive monthly increase in the consumer price index and expands the reflection process from two consecutive flat months for the index in May and June 2024,” said Jim Bard. “In the statement” against the background of solid demand, inflation has accelerated. This is a fact that the consumers who remember the Coveid-19 ERA spikes very well.
“This also makes President Trump's proposed tariffs become more difficult than it was in his first period, when both inflation and interest rates were extremely low,” Bayer continued.
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Federal Reserve is paused in reducing rates
Increasing inflation, along with the market for sustainable business and economic growth, has increased the Federal Reserve space.
Federal Reservation Kept interest rates with 4.5 % to 4.75 % In January, due to the strong economic indicators that gave the central bank more space to wait. Federal Reserve President Jerome Powell said the central bank plans to be cautious about lowering the extra rate until the labor market remains solid and prices continue to rise.
“The shortage of evolving trade policy creates a significant unknown to Federal Reserve policymakers who have to deal with potential challenges of contradictory policy for slower growth and higher inflation,” Bayer said. “While even the downward predictions are screaming from the 1970s stagnation environment, this book seems to be still applied.
“The arrest of inflation is likely to be a priority for the Federal Reserve, even at a close growth cost,” Bayer said. “Fear of inflation expectations that have not been used is only to ignore policymakers for policymakers.”
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How much more affect your wallet for longer
All signs point to the Federal Reserve interest rate for a longer period of time, which means consumers affected by stubborn interest rates and on a wide range of credit products, including credit cards, loans, insecure personal loans and loans Automobiles are impressed. , Senior Vice President of Research and Senior Counseling Transunion.
“Consumers should refrain from building and carrying large credit cards, especially given the high interest rate in this type of debt, and any time may be more than a minimum monthly due to their cards To pay. ”
In addition, Weiss recommended that consumers are watching their credit profiles and keep them in the best possible way until the rates eventually decrease to a more controllable level, they are ready to have their existing debts To pay for more affordable loans.
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