Consumer Prices: US inflation continues to decline

inflation in United States of America It fell in January. Consumer prices rose 3.1 percent in January compared to the same month last year, after 3.4 percent in December. This was announced by the Department of Labor in Washington. However, experts were expecting a sharp decline to 2.9 percent.

High inflation rates reduce the purchasing power of consumers. You can then afford it for $1 less. The burden on people caused by inflation was relatively high last year. In December, consumer prices rose by 3.4 percent. That was more than most analysts expected. Therefore, the development of inflation is an important factor in the US Federal Reserve's additional interest rate policy.

Hopes for lower interest rates are dwindling

Inflation was moderate at the beginning of the year. This has so far reinforced expectations that the Fed will consider cutting interest rates in the coming months. However, the new data could significantly slow hopes for an early reduction.

The Fed wants to sustainably control the inflation rate to reach its target value of 2.0 percent. According to Federal Reserve Chairman Jerome Powell, progress has been made. But they want to see more “good data” that points in that direction on the way to a shift in interest rates.