US inflation slows less than anticipated in January
US consumer inflation slowed less than anticipated last month, according to government data released on Tuesday, as President Joe Biden's administration battles to assuage households' worries over costs of living while he seeks reelection. The closely watched Consumer Price Index rose 3.1 percent from a year ago in January, down from 3.4 percent in December, the Department of Labour said. A measure stripping out volatile food and energy costs held steady too despite expectations it would ease. The Bureau of Labour Statistics updated the seasonal factors, the model it uses to strip out seasonal fluctuations from the data. New weights, which saw the housing share rising and that of new and used cars lowered, were used to calculate the January CPI data. That could partly explain the stronger than expected readings, which economists said were likely temporary. Financial markets anticipate that the US central bank will start cutting interest rates in May, though some economists are gravitating towards June, given the still tight labor market and persistently elevated services inflation. Policymakers have said they are in no hurry to start lowering borrowing costs and want convincing evidence that inflation is on a sustained slow path. While significant progress has been made, risks remain, including the potential for renewed supply chain problems due to Red Sea shipping disruptions and drought in the Panama Canal. The outlook for inflation, however, remains fairly favorable as the increase in rents is expected to moderate this year. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25 percent to 5.50 percent range. (Reuters/AFP)