- Inflation rose 3% on the year in January, marking the fourth consecutive month annual inflation has risen. The Federal Reserve’s inflation target is 2% per year.
- Egg prices are up 15.2% since December amid a spike in bird flu cases.
- The latest report signals a delay in further interest rate cuts by the Federal Reserve.
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Consumer prices rose at a faster pace than expected in January, the Bureau of Labor Statistics reported Wednesday, Feb. 12. The 3% annual rise in inflation was the highest since June 2024 and follows an increase of 2.9% in December.
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On the month, prices rose 0.5%, the highest monthly rise since August 2023. In December, prices rose 0.4%.
Trump blames Biden for inflation
This was the last inflation report that included time former President Joe Biden spent in the White House.
“Biden inflation up,” Trump posted to Truth Social Wednesday morning.
Point phone camera here
President Trump ran on lowering grocery prices on his way to the Oval Office.
“I won on groceries,” he told NBC News in December. “It’s a very simple word, groceries.”
Egg prices rose 15% in one month
Egg prices are soaring, however. Eggs have been hit by a spike in cases of bird flu, which affected more than 19 million egg-laying hens in January.
Egg prices rose 15.2% since December, the biggest increase since June 2015. The food index as a whole jumped 2.5% annually.
“I noticed that Waffle House just instituted a new 50-cent-per-egg surcharge due to the nationwide rise in the cost of eggs,” Sen. Chris Van Hollen, D-Md., said. “They said that’s going to be a new surcharge, and other restaurants are following suit.”
Core inflation, which strips out volatile food and energy prices, increased 3.3% compared to January 2024.
Another costly category is car insurance, which is up nearly 12% on the year.
While the shelter index is still up 4.4% on the year, that’s the lowest annual increase in about two years, showing much-needed signs of cooling. Housing accounts for about a third of the inflation index.
What the latest report means for interest rates
This report does little to indicate mortgage rates may come down soon. The 3% annual rise in inflation means the Federal Reserve is only moving further away from its 2% goal.
When inflation was coming down in the second half of last year, the central bank lowered its benchmark interest rate by 100 basis points over three cuts. On Tuesday, Feb. 11, Fed Chair Jerome Powell said he’s in no hurry for more.
“We’re in a pretty good place with this economy,” Powell said. “We want to make more progress on inflation, and we think our policy rate is in a good place. We don’t see any reason to be in a hurry to reduce it further.”
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs,” Trump posted the morning after Powell’s comment. “Lets Rock and Roll, America!!!”
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Despite the president’s adamant calls for rate cuts, probability markets see a 97% chance rates will remain static during the Fed’s next meeting in March. In fact, they don’t predict a rate cut until October or December.
Tags: Bird Flu, Consumer Price Index, Donald Trump, Economy, egg prices, egg shortage, Eggs, Federal Funds Target Rate, Federal Reserve, Housing Market, Inflation, Interest rates, Jerome Powell, mortgage rate, U.S. Economy
Simone Del Rosario: Inflation rose half a percent in January, its fastest pace in a year and a half. And the annual price rise of 3% was higher than expected. That’s according to data released by the Bureau of Labor Statistics. It marks the fourth straight month annual inflation has gone in the wrong direction.
President Donald Trump blamed the inflation rise on his predecessor, posting to Truth Social:
“BIDEN INFLATION UP!”
It’s the last consumer price report measuring inflation from when Biden was in office. Trump ran on lowering food prices and even touted it as the reason for his victory.
Donald Trump: I won on groceries. It’s a very simple word, groceries. I won an election based on that. We’re going to bring those prices way down.
Simone Del Rosario: Egg prices are soaring due to shortages. In January alone, more than 19 million egg-laying hens were affected by the bird flu.
Egg prices rose 15% since December. That’s the biggest increase since June 2015. Food as a whole is up 2.5% on the year.
Sen. Chris Van Hollen: When you look at the price of eggs these days, I noticed that Waffle House just instituted a new 50 cent per egg surcharge due to the nationwide rise in the cost of eggs. They said that’s going to be a new surcharge, and other restaurants are following suit.
Simone Del Rosario: Another costly category is car insurance, up nearly 12% on the year.
While the shelter index is still up 4.4% on the year, that’s the lowest annual increase in about two years, showing much-needed signs of cooling. Housing accounts for about a third of the inflation index.
Speaking of housing, this report does little to indicate mortgage rates may come down soon. The 3% annual rise in inflation means the Federal Reserve is only moving further away from its 2% goal. When inflation was coming down the second half of last year, the central bank lowered its benchmark interest rate by 100 basis points over three cuts. And this week, Fed Chair Jerome Powell said he’s in no hurry for more.
Jerome Powell: We’re in a pretty good place with this economy, we want to make more progress on inflation, and we think our policy rate is in a good place, and we’re not, we don’t see any reason to be in a hurry to reduce it further.
Simone Del Rosario: The next morning, Trump took to Truth Social to repeat his calls for more cuts.
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!”
Despite the president’s adamant calls for rate cuts, probability markets see a 97% chance rates will remain static during the Fed’s next meeting in March. In fact, they don’t predict a rate cut at this point until October or December.
Media Landscape
See who else is reporting on this story and which side of the political spectrum they lean. To read other sources, click on the plus signs below. Learn more about this data
Left 26%
Center 62%
Right 12%
Bias Distribution
119 other sources covering this story
Total News Sources
119
Leaning Left
23
Center
54
Leaning Right
10
Last Updated
1 week ago
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