The U.S. Treasury Secretary, Janet Yellen, said on Tuesday that the data from the Consumer Price Index for January showed progress in combating inflation despite the rise in housing costs, which pushed the index higher than economists expected. Yellen focused on the annual inflation rate of the Consumer Price Index, which reached 3.1%, rather than the unexpected 0.3% increase on a monthly basis in January.
She stated, ‘The report showed that the Consumer Price Index declined to 3.1% in January. This is six percentage points lower than its peak in June 2022.’ ‘At the same time, the anticipated recession that many forecasters expected to see as a response to reducing inflation has not materialized.’
The reading of the hotter-than-expected consumer inflation helped push stocks on Wall Street lower, leading to a decline in market expectations for interest rate cuts by the Federal Reserve. The data somewhat contradicted Yellen’s recent narrative that a ‘soft landing’ for the U.S. economy is underway, with inflation being tamed and wage growth surpassing price increases driven by post-pandemic inflation.
Yellen said, ‘We have made significant progress in our battle to reduce inflation,’ noting that the main household expenses, such as gasoline, eggs, and airfare, have decreased. She added that the U.S. economy continues to grow with historically strong labor market strength.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
