Inflation came in hotter than expected in January, stoking fears that the Federal Reserve will become even more aggressive in its fight to bring down prices.
The January reading of the Consumer Price Index – a closely watched measure of inflation that tracks fluctuations in the costs of everyday goods and services – rose 6.4% compared to the same month one year ago.
The decline marked the seventh straight month that prices have fallen year-over-year.
But on a monthly basis, prices increased 0.5% compared to December, according to the Bureau of Labor Statistics’ release on Tuesday.
Core inflation, a measure which excludes volatile food and energy prices, rose 5.6% year-over-year.
Ahead of the January Consumer Price Index’s release, economists expected inflation to rise by 6.2% year over year and by 0.4% from December to January.
Read Related Also: ‘Love Is Blind’ On The Hunt For New Hosts, Eyeing Love Match From The Show
American households are still under severe financial strain from sky-high grocery bills, rent payments and utilities. Gas prices jumped by 30 cents in January, according to AAA, adding more pain at the pump for US motorists.
Central bank officials have noted progress in the bank’s effort to tame prices – with Fed Chair Jerome Powell declaring earlier this month that the “disinflationary process has begun.” Inflation peaked at a decades-high level of 9.1% last June.
However, Powell and his colleagues implemented another quarter percentage point increase at their last meeting and said “ongoing increases” in the Fed’s benchmark interest rate were still necessary to ensure that inflation returns to its target level of 2%.
“There’s been an expectation that it’ll go away quickly and painlessly,” Powell said during a speech earlier this month. “I don’t think that’s at all guaranteed.”
The market is pricing in a 91% probability of another quarter percentage point interest rate hike when the Fed next meets on March 21-22, according to CME Group data.
