US Inflation has been trending up in recent months but within the tolerance levels. The January report, though, presented a clear red alert to the Federal Reserve.

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US Inflation is suddenly an issue again after a surprise pop in January following a slow grind in recent months. Consumer prices picked up speed at the beginning of the year, driven by rising food and energy prices.

US inflation rears its ugly head again

Economists predict that President Trump's tariffs would only serve to accelerate this trend. The consumer price index rose by the most since August 2023.

Core inflation, which does not include energy and food prices, rose 0.4 per cent, which is more than expected. Before the latest data, Fed Chair Jerome Powell indicated his reluctance to cut rates anytime soon.

He also said that new data indicate more action is needed to reign in inflation. As a result, rate-cut ambitions have taken a hit. A whole series of inflation readings have been trending up of late.

Not in a dramatic post-pandemic way. But still, on a frustrating stubborn edge away from the reasonable readings in the second half of 2024. Poor fiscal data for January doesn't help, either.

The fiscal numbers for January showed the deficit running at 25 per cent above the cumulative 2024 figure. This shows the already-high US debt load is only climbing further. Elon Musk-led doge clearly has some work to do.

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(With inputs from the agencies)