U.S. Inflation Surges in January, Shaking Markets and Fed Rate Cut Hopes

Consumer prices rose more than expected, with annual inflation hitting 3%, as Federal Reserve signals further caution on interest rate cuts.

The Price Index (CPI) rose 0.5% in January, lifting annual inflation to 3%, while core inflation, excluding food and energy, climbed to 3.3%.
The hotter-than-expected inflation data caused U.S. stock markets to fall, with the Dow, S&P 500, and Nasdaq all retreating by nearly 1%.
Federal Reserve Chair Jerome Powell reiterated that the central bank is unlikely to cut interest rates soon, citing concerns over persistent inflation.
President Trump dismissed the inflation data as 'Biden inflation' and called for lower interest rates, while his proposed tariffs are expected to further pressure prices.
Rising costs in food, energy, and transportation were significant drivers of inflation, with egg prices soaring 15% in January due to supply disruptions.