During the campaign period, Donald Trump said he would reduce inflation in the United States starting on the first day of his administration. But after three weeks, his own government admitted that controlling inflation might take a bit longer than that.
The inflation rate in the U.S. rose more than expected in January. The higher prices of eggs, due to avian flu, and energy contributed to the increased cost of living for Americans.
Inflation climbed to 3% in January, its highest rate in six months, and above the 2.9% expected by economists.
The increase comes days after the U.S. Federal Reserve decided not to change interest rates, stating that there was significant uncertainty about where the U.S. economy was headed.
Donald Trump made fighting inflation a central piece of his electoral campaign. This helped him gain many votes from non-Republicans hopeful that a ‘businessman’ would undoubtedly solve the problem. However, Trump has been proposing policies, such as higher tariffs on imports, which economists claim will have the opposite effect, meaning they will raise prices.Fight Against Inflation
The Federal Reserve drastically raised interest rates starting in 2022, hoping that higher borrowing costs would cool the economy and relieve the pressures that were driving prices up.
The institution began cutting rates last September, stating that it wanted to avoid any further cooling.
But signs of persistent inflation above the bank’s 2% target in recent months led it to keep interest rates unchanged in January.
Federal Reserve Chairman Jerome Powell told Congress on Tuesday (11) that the bank was in no hurry to cut rates further.
He noted that it was still unclear how Trump’s tariff plans would shape the Fed’s policies, as the measures could provoke a slowdown in the economy, along with a rise in prices.
Even so, on Wednesday (12), Trump urged the Fed to lower interest rates to go “hand in hand” with the tariffs.
But some analysts say that after the data from the beginning of the year, they do not expect any further rate cuts for the entire year.Source: BBC