{"id":29081,"date":"2025-02-15T12:32:39","date_gmt":"2025-02-15T20:32:39","guid":{"rendered":"https:\/\/essential.construction\/news\/inflation-heats-up-to-3-as-trump-calls-on-fed-to-cut-main-rate\/"},"modified":"2025-02-15T12:32:39","modified_gmt":"2025-02-15T20:32:39","slug":"inflation-heats-up-to-3-as-trump-calls-on-fed-to-cut-main-rate","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/inflation-heats-up-to-3-as-trump-calls-on-fed-to-cut-main-rate\/","title":{"rendered":"Inflation heats up to 3% as Trump calls on Fed to cut main rate"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">4 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"http:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1739459477\/news\/text_to_speech\/inflation-rises-trump-fed-rate-cut_zz6pb7.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li><span><span><span><span><span><span>Consumer prices rose last month at a 3% annual pace, higher than expected and the biggest gain since June, according to a government report released Wednesday, soon after President Donald Trump called on the Federal Reserve to cut the benchmark interest rate.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>A 0.4% increase in shelter costs in January <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\" target=\"_blank\"><span><span><span><span><span><span><span><span>fueled 30% of the gain<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in the Consumer Price Index, the Bureau of Labor Statistics reported. Grocery prices also pushed up inflation, surging 0.5% during the month largely due to a 15% jump in egg prices.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Fed Chair Jerome Powell, <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.youtube.com\/watch?v=n64DO1xFG70\" target=\"_blank\"><span><span><span><span><span><span><span><span>testifying before the House Financial Services Committee<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>\u00a0Wednesday<span><span><span><span><span><span>, downplayed the apparent setback to efforts by policymakers to slow inflation to their 2% target. \u201cThe CPI reading was above almost every forecast, but I would just offer a note of caution on this,\u201d he said. \u201cWe don&#8217;t get excited about one or two good readings, if we don&#8217;t get excited about one or two bad readings.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p>T<span><span><span><span><span><span>he unexpected rise in price pressures prompted traders in interest rate futures to increase the probability that the Fed will hold the federal funds rate at its current range between 4.25% and 4.5% beyond a meeting in May.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Traders on Wednesday saw 88% odds of such an outcome compared with 78% on Tuesday, according to <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\"><span><span><span><span><span><span><span><span>the CME FedWatch Tool<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>&#8220;This is a tough inflation report to get while the White House is looking at further tariffs with consumer inflation expectations jumping higher,\u201d <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>Scott Helfstein, head of investment strategy at asset manager Global X, said in an email.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Consumer expectations for inflation a year from now rose to 4.3% this month from 3.3% last month, \u201cthe highest reading since November 2023 and marking two consecutive months of unusually high increases,\u201d Joanne Hsu, director of the<\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"http:\/\/www.sca.isr.umich.edu\/\" target=\"_blank\"><span><span><span><span><span><span><span><span> University of Michigan\u2019s consumer survey<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, said Friday.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cMany consumers appear worried that high inflation will return within the next year,\u201d Hsu said, noting concerns that tariffs will push up prices.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Powell, reiterating testimony to a Senate panel on Tuesday, said the central bank is in no rush to cut the federal funds rate given strength in the job market and solid economic growth.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The Fed paused monetary easing last month after trimming the main rate by a full percentage point from September through December. Policymakers noted that inflation, although slowing from a four-decade high, has yet to return to their 2% target.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe&#8217;re close, but not there on inflation, and you did see today&#8217;s inflation print, which says the same thing,\u201d Powell testified on Wednesday. \u201cWe want to keep policy restrictive for now.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Trump, writing on social media, called on policymakers to <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/truthsocial.com\/@realDonaldTrump\/posts\/113991030846598649\" target=\"_blank\"><span><span><span><span><span><span><span><span>press on with monetary easing<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201c<\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>Interest rates should be lowered, something which would go hand in hand with upcoming tariffs!!!\u201d Trump said.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>While campaigning last year for a second term, Trump broke from the precedent set by presidents for several decades by saying that he should <\/span><\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.reuters.com\/world\/us\/trump-says-president-should-have-say-fed-decisions-2024-08-08\/\" target=\"_blank\"><span><span><span><span><span><span><span><span><span>have a \u201csay\u201d on monetary policy<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>Powell, along with Democratic lawmakers at the hearing, defended Fed independence, pushing back on the idea that the executive branch should influence central bank decisions.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>\u201cResearch over many, many years and many, many jurisdictions shows that some degree of independence is very important in keeping inflation under control,\u201d Powell said.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>\u201cThe connection is obvious,\u201d he said. \u201cIf politicians are going to want to be re-elected and things like that, they&#8217;re not going to be focused on the longer term.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>\u201cWe have the mandate to remain separate from all of that, to stay out of all of that,\u201d Powell said.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>In turn, Powell during the hearing repeatedly declined to comment on tariffs recently announced by the Trump administration.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span><span>\u201cThe Fed has no role in setting tariffs and we don&#8217;t comment on decisions made by those who do have that authority \u2014 we try to stick to our own knitting,\u201d he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/inflation-rises-trump-fed-rate-cut\/740051\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 4 min This audio is auto-generated. 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