02/10/2022

Consumer Prices Post Largest Annual Gain in 40 Years

Inflation has become widespread, problematic

U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years, fueling financial markets speculation for a hefty 50 basis points interest rate hike from the Federal Reserve next month.

The broad increase in prices reported by the Labor Department on Thursday was led by soaring costs for rents, electricity and food, and could heap more political pressure on President Joe Biden, whose popularity has been declining amid anxiety over the rising cost of living.

High inflation, which has overshot the Fed's 2 percent target, could imperil Biden's economic agenda. Biden in a statement acknowledged the hardships American families are facing, but noted "there are also signs we will make it through this challenge." He was alluding to the unchanged reading in the prices of motor vehicles, one of the major drivers of inflation.

Please select this link to read the complete article from Reuters.