{"id":766,"date":"2023-02-14T11:18:45","date_gmt":"2023-02-14T16:18:45","guid":{"rendered":"https:\/\/embarrdowns.com\/consumer-prices-rise-6-4-in-january-fed-raises-rates-to-combat-inflation\/"},"modified":"2023-02-14T11:18:45","modified_gmt":"2023-02-14T16:18:45","slug":"consumer-prices-rise-6-4-in-january-fed-raises-rates-to-combat-inflation","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/consumer-prices-rise-6-4-in-january-fed-raises-rates-to-combat-inflation\/","title":{"rendered":"Consumer Prices Rise 6.4% in January, Fed Raises Rates to Combat Inflation"},"content":{"rendered":"

Consumer prices rose 6.4% in January, according to the latest consumer price index (CPI) report released by the Labor Department on Tuesday morning.[0]<\/a><\/sup> This marks a slight slowdown from the 6.5% seen in December, but still hotter than the 6.2% economists had predicted.[1]<\/a><\/sup> Month-to-month inflation ticked up 0.5%, after dropping in December, indicating that overall inflation is still far from tamed.[2]<\/a><\/sup><\/p>\n

The core CPI, which excludes food and fuel prices, rose 0.4% for the month as expected and 5.6% for the year, slightly ahead of expectations.[3]<\/a><\/sup> This marks the seventh consecutive month of declining annual inflation after the rate peaked at a whopping 9.1% in June.[4]<\/a><\/sup><\/p>\n

The shelter index \u2013 comprising of rent and housing costs \u2013 has seen a year-on-year rise of 7.9%, with a monthly upturn of 0.7%.[5]<\/a><\/sup> Half of January’s inflation rate was attributed to this.[5]<\/a><\/sup> Food prices rose 10.1% from January of last year, continuing an annual double-digit increase for nine months in a row, though lower than the peak in August.[6]<\/a><\/sup><\/p>\n

Federal Reserve officials have noted progress in the bank\u2019s effort to tame prices \u2013 with Fed Chair Jerome Powell declaring earlier this month that the \u201cdisinflationary process has begun.\u201d[7]<\/a><\/sup> However, Powell and his colleagues are likely to keep raising rates, he said, as wage growth is key to the outlook for service-sector inflation.<\/p>\n

Revisions show that inflation is cooling less than previously thought, signaling that the most severe inflation in four decades is gradually dissipating.[8]<\/a><\/sup> Prices rose 0.5 between December and January \u2014 the fastest one-month gain since October of last year \u2014 suggesting that inflation is still far from tamed.[0]<\/a><\/sup><\/p>\n

Last week, Federal Reserve Chairman Jerome Powell stated that he intends to maintain interest rates at a higher level until inflation nears the 2% target. Powell wants to raise the interest rates to a large extent, so that borrowing and investing become more expensive, thus decreasing the demand in the economy and lowering prices.[9]<\/a><\/sup> <\/p>\n

The latest Consumer Price Index report does not significantly alter the Federal Reserve’s policy stance.[10]<\/a><\/sup> It appears almost certain that the Federal Reserve (Fed) will raise interest rates by a quarter-point in both March and May, as the Fed chooses to be overly cautious in its monetary policy.[10]<\/a><\/sup> An increase in borrowing costs can impede economic growth, leading to higher unemployment and increasing the likelihood of a recession.[11]<\/a><\/sup><\/p>\n

0. <\/span>“Inflation rose 6.4% in January” Fox Business, 13 Feb. 2023, https:\/\/www.foxbusiness.com\/economy\/consumer-prices-inflation-rose-january<\/a><\/a><\/p>\n

1. <\/span>“Inflation Fell To 6.4% In January\u2014But Is Still Worse Than Economists Expected As Rent, Food And Gas Prices Keep Rising” Forbes, 14 Feb. 2023, https:\/\/www.forbes.com\/sites\/jonathanponciano\/2023\/02\/14\/inflation-spiked-64-in-january-worse-than-economists-expected-as-rent-food-and-gas-prices-keep-rising<\/a><\/a><\/p>\n

2. <\/span>“Inflation is higher than expected at 6.4%, with the ‘most important’ measure remaining elevated” CNBC, 14 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/14\/inflation-higher-than-expected-in-january.html<\/a><\/a><\/p>\n

3. <\/span>“Consumer prices rise at faster pace in January” Axios, 14 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/14\/cpi-january-inflation-report-2023<\/a><\/a><\/p>\n

4. <\/span>“Inflation was still hot in January, but some prices are cooling off” CNN, 14 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/14\/economy\/cpi-inflation-january\/index.html<\/a><\/a><\/p>\n

5. <\/span>“Inflation ticks down to 6.4% even as January prices climbed” MLive.com, 14 Feb. 2023, https:\/\/www.mlive.com\/public-interest\/2023\/02\/inflation-ticks-down-to-64-even-as-january-prices-climbed.html<\/a><\/a><\/p>\n

6. <\/span>“Grocery prices remain higher in January, led by eggs and citrus” Yahoo News, 14 Feb. 2023, https:\/\/news.yahoo.com\/grocery-prices-remain-higher-in-january-led-by-eggs-and-citrus-152442563.html<\/a><\/a><\/p>\n

7. <\/span>“Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago” CNBC, 14 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/14\/consumer-price-index-january-2023-.html<\/a><\/a><\/p>\n

8. <\/span>“Grocery Inflation Slows in January, but Remains High” TIME, 14 Feb. 2023, https:\/\/time.com\/6255258\/inflation-grocery-prices-rise<\/a><\/a><\/p>\n

9. <\/span>“January inflation hit 6.4%, missing analysts’ expectations for a faster slowdown” NBC News, 14 Feb. 2023, https:\/\/www.nbcnews.com\/business\/economy\/inflation-rate-january-2023-what-it-means-will-interest-rates-go-up-rcna70401<\/a><\/a><\/p>\n

10. <\/span>“CPI Inflation Comes In Hot, Keeping Fed On Guard” Investor’s Business Daily, 14 Feb. 2023, https:\/\/www.investors.com\/news\/economy\/cpi-inflation-comes-in-hot-keeping-fed-on-guard-sp-500<\/a><\/a><\/p>\n

11. <\/span>“CPI shows inflation still sticky and slowing grudgingly” MarketWatch, 14 Feb. 2023, https:\/\/www.marketwatch.com\/story\/cpi-shows-u-s-inflation-still-sticky-e08c9671<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Consumer prices rose 6.4% in January, according to the latest consumer price index (CPI) report released by the Labor Department on Tuesday morning.[0]<\/a><\/sup> This marks a slight slowdown from the 6.5% seen in December, but still hotter than the 6.2% economists had predicted.[1]<\/a><\/sup> Month-to-month inflation ticked up 0.5%, after dropping in December, indicating that overall inflation is still far from tamed.[2]<\/a><\/sup><\/p>\n

The core CPI, which excludes food and fuel prices, rose 0.4% for the month as expected and 5.6% for the year, slightly ahead of expectations.[3]<\/a><\/sup> This marks the seventh consecutive month of declining annual inflation after the rate peaked at a whopping 9.1% in June.[4]<\/a><\/sup><\/p>\n

The shelter index \u2013 comprising of rent and housing costs \u2013 has seen a year-on-year rise of 7.9%, with a monthly upturn of 0.7%.[5]<\/a><\/sup> Half of January’s inflation rate was attributed to this.[5]<\/a><\/sup> Food prices rose 10.1% from January of last year, continuing an annual double-digit increase for nine months in a row, though lower than the peak in August.[6]<\/a><\/sup><\/p>\n

Federal Reserve officials have noted progress in the bank\u2019s effort to tame prices \u2013 with Fed Chair Jerome Powell declaring earlier this month that the \u201cdisinflationary process has begun.\u201d[7]<\/a><\/sup> However, Powell and his colleagues are likely to keep raising rates, he said, as wage growth is key to the outlook for service-sector inflation.<\/p>\n

Revisions show that inflation is cooling less than previously thought, signaling that the most severe inflation in four decades is gradually dissipating.[8]<\/a><\/sup> Prices rose 0.5 between December and January \u2014 the fastest one-month gain since October of last year \u2014 suggesting that inflation is still far from tamed.[0]<\/a><\/sup><\/p>\n

Last week, Federal Reserve Chairman Jerome Powell stated that he intends to maintain interest rates at a higher level until inflation nears the 2% target. Powell wants to raise the interest rates to a large extent, so that borrowing and investing become more expensive, thus decreasing the demand in the economy and lowering prices.[9]<\/a><\/sup> <\/p>\n

The latest Consumer Price Index report does not significantly alter the Federal Reserve’s policy stance.[10]<\/a><\/sup> It appears almost certain that the Federal Reserve (Fed) will raise interest rates by a quarter-point in both March and May, as the Fed chooses to be overly cautious in its monetary policy.[10]<\/a><\/sup> An increase in borrowing costs can impede economic growth, leading to higher unemployment and increasing the likelihood of a recession.[11]<\/a><\/sup><\/p>\n

0. <\/span>“Inflation rose 6.4% in January” Fox Business, 13 Feb. 2023, https:\/\/www.foxbusiness.com\/economy\/consumer-prices-inflation-rose-january<\/a><\/a><\/p>\n

1. <\/span>“Inflation Fell To 6.4% In January\u2014But Is Still Worse Than Economists Expected As Rent, Food And Gas Prices Keep Rising” Forbes, 14 Feb. 2023, https:\/\/www.forbes.com\/sites\/jonathanponciano\/2023\/02\/14\/inflation-spiked-64-in-january-worse-than-economists-expected-as-rent-food-and-gas-prices-keep-rising<\/a><\/a><\/p>\n

2. <\/span>“Inflation is higher than expected at 6.4%, with the ‘most important’ measure remaining elevated” CNBC, 14 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/14\/inflation-higher-than-expected-in-january.html<\/a><\/a><\/p>\n

3. <\/span>“Consumer prices rise at faster pace in January” Axios, 14 Feb. 2023, https:\/\/www.axios.com\/2023\/02\/14\/cpi-january-inflation-report-2023<\/a><\/a><\/p>\n

4. <\/span>“Inflation was still hot in January, but some prices are cooling off” CNN, 14 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/14\/economy\/cpi-inflation-january\/index.html<\/a><\/a><\/p>\n

5. <\/span>“Inflation ticks down to 6.4% even as January prices climbed” MLive.com, 14 Feb. 2023, https:\/\/www.mlive.com\/public-interest\/2023\/02\/inflation-ticks-down-to-64-even-as-january-prices-climbed.html<\/a><\/a><\/p>\n

6. <\/span>“Grocery prices remain higher in January, led by eggs and citrus” Yahoo News, 14 Feb. 2023, https:\/\/news.yahoo.com\/grocery-prices-remain-higher-in-january-led-by-eggs-and-citrus-152442563.html<\/a><\/a><\/p>\n

7. <\/span>“Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago” CNBC, 14 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/14\/consumer-price-index-january-2023-.html<\/a><\/a><\/p>\n

8. <\/span>“Grocery Inflation Slows in January, but Remains High” TIME, 14 Feb. 2023, https:\/\/time.com\/6255258\/inflation-grocery-prices-rise<\/a><\/a><\/p>\n

9. <\/span>“January inflation hit 6.4%, missing analysts’ expectations for a faster slowdown” NBC News, 14 Feb. 2023, https:\/\/www.nbcnews.com\/business\/economy\/inflation-rate-january-2023-what-it-means-will-interest-rates-go-up-rcna70401<\/a><\/a><\/p>\n

10. <\/span>“CPI Inflation Comes In Hot, Keeping Fed On Guard” Investor’s Business Daily, 14 Feb. 2023, https:\/\/www.investors.com\/news\/economy\/cpi-inflation-comes-in-hot-keeping-fed-on-guard-sp-500<\/a><\/a><\/p>\n

11. <\/span>“CPI shows inflation still sticky and slowing grudgingly” MarketWatch, 14 Feb. 2023, https:\/\/www.marketwatch.com\/story\/cpi-shows-u-s-inflation-still-sticky-e08c9671<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":765,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/766"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=766"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/766\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/765"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}