US inflation has reached its highest rate since June last year, with consumer prices rising 0.5% from December, according to the latest Consumer Price Index data released by the Bureau of Labor Statistics.
The unexpected increase in inflation, driven by higher energy and food costs, particularly eggs, which rose 53% year over year, is a concern for policymakers, including President Donald Trump, who has been advocating for lower interest rates and tariffs to boost economic growth.
Economists warn that the current trajectory could keep the Federal Reserve on the sidelines this year, meaning high interest rates remain for consumers and businesses. This would contradict the Fed’s target of taming inflation.
Trump claims his administration’s policies are working, but experts disagree, citing the potential harm caused by tariffs, supply-side tax cuts, and regulatory changes to drive prices higher.
The mixed bag of economic data raises questions about the ability of policymakers to achieve a “soft landing” – avoiding a recession while stabilizing prices. The latest inflation report may prompt the Fed to reassess its approach to managing the economy.
Source: https://edition.cnn.com/2025/02/12/business/us-cpi-consumer-inflation-january/index.html