Catenaa, Friday, February 14, 2025 – US inflation unexpectedly rose to 3% in January, the highest level in six months, as soaring egg and energy prices pushed up consumer costs, according to data released Wednesday.
The increase exceeded economists’ forecast of 2.9%, posing a challenge for the Federal Reserve and President Donald Trump’s economic agenda.
The rise comes just weeks after the central bank opted to hold interest rates steady, citing economic uncertainty.
Core inflation, which excludes food and energy, climbed 0.4%—the fastest pace since March—fueling concerns about persistent price pressures.
Grocery costs jumped 0.5% from December, with egg prices surging over 15% due to an avian flu outbreak. Meanwhile, housing costs increased 4.4% year-over-year, marking the slowest growth since early 2022.
Economists warn that Trump’s proposed tariff hikes on imports could further drive inflation.
Federal Reserve Chair Jerome Powell told Congress this week that the bank remains cautious about cutting interest rates, despite Trump urging lower rates to complement his trade policies. Some analysts now doubt the Fed will cut rates this year.
Wall Street markets reacted negatively, with stocks closing mostly lower while US government bond yields climbed, signaling investor concerns about prolonged high interest rates.
