US inflation worsened last month in latest sign of sticky price pressures

The consumer price index increased 3% in January from a year ago, Wednesday’s (February 12) report from the Labor Department showed, up from 2.9% the previous month. It has increased from a 3 1/2 year low of 2.4% in September.

The figures underscore the stickiness of inflation, which created a major political problem for former President Joe Biden. President Donald Trump pledged to reduce prices in last year’s campaign, though most economists worry that his many proposed tariffs could at least temporarily increase costs.

Also Read: US core inflation seen rising at firm pace in JanuaryLater Wednesday, Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee, where he will likely be asked about inflation and the Fed’s response to it.

The Fed raised its benchmark rate in 2022 and 2023 to a two-decade high of 5.3% to combat inflation. With inflation down significantly from its 9.1% peak in June 2022, it cut its rate to about 4.3% in its final three meetings last year.

Fed officials are mostly confident that inflation over time will head lower, but they want to see further evidence that it is declining before cutting their key rate any further. The Fed’s rate typically influences other borrowing costs for things like mortgages, auto loans, and credit cards.

Also Read: Australia says no plan to retaliate on US steel tariffs