Annual inflation rose to 3.0%, from 2.9% in January, US MoM inflation rose to 0.5%, from 0.4% in January.
Annual core inflation (excl. energy and food) rose to 3.3% in January from 3.2% in December and the US MoM core inflation rose to 0.4% for January, the highest gain since March 2024.
Isaac Stell, Investment Manager at Wealth Club said, “Annual US inflation increased for the fourth month in a row to 3.0% in January, with core inflation coming in hotter than expected.
The Federal Reserve will likely feel vindicated in its decision to pause rate cuts in January, as the spectre of inflation looks like it’s raising its ugly head once again.
“With inflation stuck above the 2% target, continued strong economic growth and a strong labour market, the need for further rate cuts looks to be diminishing by the day. Markets are now pricing in just one rate cut for 2025.
The Fed not only has to juggle its dual mandate of price stability and maximum employment, but must also deal with the White House tariff and policy circus, which is adding additional uncertainty to the economic outlook. Risks seem firmly skewed to the upside for inflation, so Jerome Powell’s stance of being ‘in no hurry to adjust policy’ looks set to endure for the time being. But, if things carry on the way they’re going, whispers of a rate hike may start to echo through the corridors of the Fed.”
