A supermarket shopper walked past the display of eggs for sale in Monterey Park, California on February 10, 2025.
Frederick J. Brown | AFP | Getty Images
Inflation exceeded January expectations, providing further impetus for the Fed’s boundaries to hold interest rates.
The Consumer Price Index, a broad measure of the cost of goods and services across the U.S. economy, accelerated the month’s seasonal adjustment to 0.5%, bringing annual inflation to 3%, the Bureau of Labor Statistics reported Wednesday. They are 0.3% and 2.9% higher than their respective Dow Jones estimates. The annual rate is 0.1 percentage point higher than in December.
In addition to volatile food and energy prices, CPI rose 0.4% in the month, bringing inflation to 3.3% for 12 months. In comparison, the estimated values ​​are 0.3% and 3.1%. The annual core interest rate also rose by 0.1 percentage point from December.
BLS said housing costs continue to be a problem of inflation, up 0.4% in the month, accounting for about 30% of the overall growth.
Food prices rose 0.4% and egg prices rose 15.2% in connection with ongoing problems with bird flu, which forced farmers to destroy millions of chickens. The agency said it was the biggest increase in egg prices since June 2015, causing about two-thirds of home prices to rise. Egg prices have soared 53% over the past year.
After the news, the market fell, with futures related to a drop in the Dow Jones industrial average of more than 400 points, while bond yields are higher.
The report comes after Fed Chairman Jerome Powell said the central bank could temporarily shelve interest rates for some time.
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