Inflation has surged to start 2025, with a 4.5% annual rate increase over three months, complicating the economic outlook. Prices were initially stable but have risen significantly, prompting policymakers to reconsider strategies. Notable spikes include a 15% rise in egg prices for January, reflecting broader trends across groceries and other items. Core inflation has also risen, indicating persistent pressure despite some easing in shelter costs. This situation echoes concerns from 2024, where early inflation indicators led to reassessments of interest rate adjustments.
The past six months instead look like an uphill path as inflation continues to surge ahead, impacting Americans' buying power.
January's Consumer Price Index print marks an unwelcome re-acceleration in prices to start off 2025, forcing a reassessment of rate-cutting expectations.
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