Inflation Rises More Than Expected in January Prompting Federal Reserve Concerns
Inflation rose by 0.5% in January, surpassing expectations, with the annual rate reaching 3%. This has raised concerns for the Federal Reserve regarding interest rates.
Inflation perked up more than anticipated in January, providing further incentive for the Federal Reserve to hold the line on interest rates.
The consumer price index, a broad measure of costs in goods and services across the U.S. economy, accelerated a seasonally adjusted 0.5% for the month, putting the annual inflation rate at 3%, the Bureau of Labor Statistics reported Wednesday. They were higher than the respective Dow Jones estimates for 0.3% and 2.9%.
Excluding volatile food and energy prices, CPI rose 0.4% on the month, putting the 12-month inflation rate at 3.3%. That compared to respective estimates for 0.3% and 3.1%.
Shelter costs continued to be a problem for inflation, rising 0.4% on the month and accounting for about 30% of the entire increase, the BLS said.
Markets tumbled following the news, with futures tied to the Dow Jones Industrial Average sliding more than 400 points while bond yields soared.
