In January, inflation in the US rose to an annualized rate of 3%, up from December's 2.9%. This increase, coupled with a rise in the core index to 3.3%, has unsettled investors, resulting in declines in major stock indices. The inflation surge is a reminder of the enduring impact of the pandemic on global economies. As prices remain high, there is growing concern regarding the Federal Reserve's interest rate strategy, with renewed calls from Trump for rate reductions to stimulate economic growth.
The latest inflation data will heighten speculation as to how quickly policymakers at the US Federal Reserve will cut interest rates.
While price growth has since fallen dramatically, consumer prices have remained high challenging perceptions of an economy which, on paper, has proved remarkably resilient.
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