US consumer inflation unexpectedly rose in January, adding pressure on the Federal Reserve to maintain its pause on interest rate cuts. According to government data released on Wednesday, the consumer price index (CPI) increased to 3.0 percent from a year ago, up from 2.9 percent in December, surpassing the 2.8 percent median forecast predicted by economists surveyed by Dow Jones Newswires and The Wall Street Journal.
The data is expected to bolster calls for the Fed to keep its key lending rate at the current range of 4.25 to 4.50 percent as it monitors inflation trends. The central bank, which operates independently, has a long-term inflation target of two percent, measured against a different gauge, and primarily manages it through interest rate adjustments that influence borrowing costs for both consumers and businesses.
Another concerning detail in the report was the increase in core inflation, which excludes volatile food and energy prices. Core inflation rose slightly to 3.3 percent year-over-year, signaling persistent price pressures. On a monthly basis, overall inflation climbed by 0.5 percent in January, while core inflation advanced by 0.3 percent.