U.S. consumer prices increased by the most in nearly 1-1/2 years in January, with Americans facing higher costs for housing and food, reinforcing the Federal Reserve's message that it was in no rush to resume cutting interest rates amid growing uncertainty over the economy. The hotter-than-expected inflation reported by the Labor Department on Wednesday was likely partly due to businesses raising prices at the start of the year. However, the surge in prices offered a cautionary note to President Donald Trump's push for tariffs on imported goods, which have been panned by economists as inflationary.
The U.S. consumer price index increased more than expected in January, reinforcing the Federal Reserve's message that it was in no rush to resume cutting interest rates amid growing uncertainty over the economy. The CPI jumped 0.5% last month after gaining 0.4% in December, the Labor said on Wednesday. In the 12 months through January, it increased 3.0% after advancing 2.9% in December. Economists polled by Reuters had forecasted the CPI gaining 0.3% and rising 2.9% year-on-year. Fed funds futures showed traders do not expect another Fed ease until at least September, having shown before the report expectations for a 25-basis point cut in June.
Sources: Reuters & Yahoo! Finance