Donald Trump’s promise to lower costs on ‘day one’ reveals

Inflation became faster in January, according to data released on Wednesday morning, putting pressure on the new administration to honor its central campaign mortgage to reduce prices “on day 1” in the midst of uncertainty about the expected effects of President Trump’s economic policies.

According to the Bureau of Labor Statistics, the consumer price index (CPI) increased by 0.5 percent month-over month in January 2025, up from 0.4 percent in December and far ahead of agreement forecasts of 0.3 percent. The All-Item index increased up to 3.0 percent for the 12 months ending January. Analysts had a pencil of 2.9 percent in line with December’s reading.

The closer monitored core inflation rate – which excludes the impact of unstable prices such as food and energy – also exceeded expectations that became faster to 0.4 Percentage in January, up from 0.2 percent in December and surpassing forecasts of 0.3 percent. On an annual basis, core inflation rose to 3.3 percent, up from 3.2 percent the previous month and exceeded the market’s expectations of 3.1 percent.

Why it matters

The weaker than expected figures, all of which fell under market forecasts, show that the United States is not yet out of the forest when it comes to inflation. As with the recently deficient job report, the White House is likely to use Wednesday’s data as evidence of the extracted effects of economic policy of the economic time. However, the number will also intensify the pressure on the new administration, which has framed to limit inflation as a central focus.

The reading could also inform Federal Reserve’s next step on interest, after keeping these stable after a series consecutive cuts at the end of 2024. Despite calls for “immediate” cuts from President Trump, President Jerome Powell has recently repeated the Fed’s desire to become a bold file course while the effects of the new administration’s financial approach are taking place.

As the first official inflation reading in 2025 and the first to cover the period since Trump went back into the oval office, Wednesday’s numbers will probably also serve as a reference point for the impact of his flagship policies, tax cuts and immigration crashes- Of the US inflation rate in the future.

What to know

According to the Bureau of Labor Statistics, the shelter index rose 0.4 percent in January, with rent that accounts for almost 30 percent of the monthly all goods are rising in January.

The energy index rose 1.1 percent monthly in January, when the gasoline index rose 1.8 percent. The food index rose to 0.4 percent, with food at home increasing by 0.5 percent and food away from home 0.2 percent.

During the 12 months ended in January, the energy index increased by 1.0 percent, while the food index increased by 2.5 percent.

The price of eggs – a key inflationary touch stone for many Americans – set 15.2 percent between December and January. According to Bureau of Labor Statistics, this marked the “biggest increase in the egg index since June 2015 and … accounted for about two -thirds of the total monthly food at home.”

Reducing the cost of goods in the United States was one of Trump’s central campaign promises, the president said his administration would start reducing prices “On the first day. “However, the latest report suggests that his administration will have to go back some of its promises of inflation.

What people say

During an interview with CBS Vice -President JD Vance Said that even though he was convinced that the new administration could bring down prices, this would take “some time.”

“Biden inflation up!” President Trump Sent to truth social Minutes after inflation reading.

In his Time magazine interview at the end of December, President Trump Said, “Look, they got (prices) up. I want to bring them down. It’s hard to bring things down when they’re up. You know it’s very hard. But I think they’ll. I think that energy will bring them down.

“We are in a pretty good place with this economy. We will make more progress with inflation and we think our political rate is in a good place and we see no reason to be busy reducing it further, ” Federal Reserve President Powell said of potential interest rates under his testimony to the Senate On Tuesday. However, he suggested that fat would be ready to act inflation facilitated or in the case of the slowdown of the labor market.

Powell said earlier that bold operated on a “Wait and see“Basis, like” We do not know what will happen to customs, with immigration, with fiscal policy and with regulatory policy. “

What happens next?

Jerome Powell will appear before Congress again later on Wednesday to give testimony.

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