US inflation
picked up broadly at the start of the year, further undercutting chances of multiple
Federal Reserve interest-rate cuts
this year at the same time the Trump administration presses forward with tariffs. The monthly consumer price index rose in January by the most since August 2023, led by a range of
household expenses
like groceries and gas, as well as housing costs. Excluding often-volatile food and energy costs, the so-called core CPI climbed 0.4%, more than forecast, fueled by car insurance, airfares and a record monthly increase in the cost of prescription drugs.
Inflation tends to come in higher in January, because many companies choose the start of the year to hike prices and fees. That pattern has been been exacerbated in the post-pandemic era, and several forecasters suggested that the jump in price growth last month won’t be repeated going forward.
Still, Wednesday’s report serves as further evidence that inflation progress has at least stalled – if not in danger of being reversed. Combined with a solid labour market, it will likely keep the Fed on hold for the foreseeable future.
