CPI Jan 2025:

The inflation started more than expected in January, providing more incentives for the Federal Reserve to keep the interest rate line.

the Consumer price indexThe Labor Statistics Office stated on Wednesday that the wide amount of costs in goods and services throughout the American economy, is 0.5 % faster in the season, which put the annual inflation rate by 3 %. The highest estimated Dow Jones estimated at 0.3 % and 2.9 %. The annual average was 0.1 percentage points above December.

With the exception of food and volatile energy, the consumer price index increased by 0.4 % per month, putting the inflation rate for 12 months at 3.3 %. Which compared to the estimates concerned by 0.3 % and 3.1 %. The annual basic average increased by 0.1 percentage points from December.

The markets fell after the news, with future contracts linked to the Dow Jones industrial average exceeding 400 points, while the bond yields rise sharply.

“Waiting and celebrating” will wait for FED for a longer period than expected after the inflation report at the Red Consumer Prices Index in January, “wrote Josh Josh Joshin, an investment strategy analyst at Claberbridge Investments. “This report puts the final nail of the coffin for the price reduction cycle, which we believe has ended.”

BLS said that shelter costs are still a problem for inflation, as it increased by 0.4 % per month and accountable about 30 % of the entire increase. Within this category, home owners measure what they can get if they rent their homes by 0.3 % per month and it rises by 4.6 % on an annual basis.

“The costs of shelter are still the main driver of basic inflation, as higher mortgage rates pay more Americans to a rental market in which vacancies are close to record,” said Eric Norland, chief economist at the CME group. “It seems that traders believe that today’s data makes additional discounts in the federal reserve less than the possibility of their previous expectations.”

Food prices jumped by 0.4 %, and pushed them by 15.2 % in egg prices related to continuous problems with bird influenza birds that forced farmers to destroy millions of chicken. The office said it was the biggest increase in egg prices since June 2015 and was responsible for about two -thirds of the high food prices at home. Egg prices increased by 53 % during the past year.

Non -alcoholic drinks have been 2.2 % profit over the past 12 months, while tomatoes have decreased in January by 2 % and fresh vegetables decreased by 2.6 %.

The prices of the new vehicles were flat, but used cars and trucks saw an increase of 2.2 %, and the car insurance increased by 2 %, prompting the annual profit to 11.8 %. Energy prices increased by 1.1 % with gasoline prices increased by 1.8 %.

The report comes a day after the Federal Reserve Chair Jerome Powell He pointed out that the central bank may be suspended for a period of time when it comes to interest rates. Powell told the members of the Senate Banking Committee that he believed that the Federal Reserve does not need to be in a wheel of its order to decrease the prices because it evaluates the progress in inflation and a president as president Donald Trump Continue plans to impose customs duties against imports.

The markets are largely expecting that the Federal Reserve will remain waiting for a long time and prompted the possibility of reducing the next rate until September after the consumer price index report, according to the CME data. Merchants also include about 70 % of the possibility that the Federal Reserve reduces only once this year.

Trump, though, still pushes low rates. In a post on the social truth about half an hour before the release of the consumer price index, the president said: “interest rates must be reduced, which is going alongside with the next tariff !!!”

However, the release of the consumer price index may make more mitigation in monetary policy.

BLS said in a separate statement that the jump in the prices ate in workers’ salaries, as the consumer price index is getting fully compensated for 0.5 % in the profits in the middle hour.

Correction: Josh Joshiner is an investment strategy analyst at Clearbridge Investments. A previous version made mistakes in his name errors.