CPI Report January 2025: Prices rise 0.5%

Inflation rose more than expected in January, providing additional incentives for the Federal Reserve to hold a line on interest rates.

The Consumer Price Index, a measure of the broad cost of goods and services across the US economy, accelerated the month’s seasonally adjusted 0.5% to 3% annual inflation, the Bureau of Labor Statistics on Wednesday. I’ve reported it. They were 0.3% and 2.9% above the Dow Jones estimates for their respective. The annual rate was 0.1 percentage points higher than in December.

Excluding volatile food and energy prices, CPI rose 0.4% that month, bringing inflation to 3.3% for the 12-month. Comparing with estimates for 0.3% and 3.1% respectively. The annual core rate has also increased by 0.1 percentage points since December.

The market fell following the news, with the Dow Jones Industrial Arage tied to more than 400 points of sliding, and Bond shrunk sharply higher.

“The “waiting” will result in the “waiting” Fed waiting longer than expected after the red-hot CPI inflation report in January,” wrote Josh Jamner, investment strategy analyst at Clearbridge Investments. Masu. “This report puts the final nail into the co for the rate-cut cycle.

In fact, even if Fed Chairman Jerome Powell said he would provide a “caution note” about reading too much CPI report, market prices have shifted their prospects for the next rate cut to at least September.

“We are not excited about one or two good reads, we are not excited about one or two bad reads,” Powell said in testimony before the House Financial Services Committee. He added that the Fed is more closely following the Commerce Department’s personal consumption expenditure pricing calculation.

Shelter costs remain a problem of inflation, increasing by 0.4% for the month, accounting for around 30% of the total increase, BLS said. Within the category, it is an indicator that estimates what homeowners can get if they rent a home, up 0.3% that month and 4.6% per year.

Eric Norland, chief economist for CME Group, said: “Traders seem to believe that today’s data makes them less likely to have an additional Fed cut than they previously expected.”

Food prices rose 0.4%, boosted by a 15.2% surge in egg prices related to the ongoing problem of bird flu in birds forced farmers to destroy millions of chickens. The bureau said it was the biggest rise in egg prices since June 2015, and is responsible for about two-thirds of the rise in food from home. Egg prices have risen 53% over the past year.

Non-alcoholic beverages recorded a 2.2% increase in the last 12 months, but tomatoes fell by 2% in January, while other fresh vegetables fell by 2.6%.

Prices for new vehicles remained flat, but used cars and trucks increased by 2.2%, while car insurance increased by 2%, pushing the annual increase to 11.8%. Energy prices rose 1.1% as gasoline prices rose 1.8%.

The report comes the day after Powell showed that the central bank could be on hold for some time on interest rates. Powell believes the Fed doesn’t need to hurry down rates as President Donald Trump continues his plans to collect tariffs on imports to assess the progress of inflation from members of the Senate Banking Committee. He said.

CME Group data shows that the market is largely pending for a long time, and expects it to boost its next rate reduction probability through September following the CPI report. Traders also hinted at a roughly 70% chance that the Fed will cut only once this year.

But Trump is still seeking lower fees. In a post about the truth about social social about 30 minutes before the release of CPI, the president said, “We need to lower our interest rates.

However, CPI releases can complicate further easing of monetary policy.

BLS is heading towards workers’ pay as it completely offsets the increase in CPI completely from 0.5% moving completely on average hourly revenue.

Fix: Josh Jamner is an investment strategy analyst at Clearbridge Investments. Previous versions spelled his name wrong.