‘Biden inflation up’: US inflation fails to meet expectations in January
A customer shops for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas. (AFP Photo)
U.S. consumer inflation saw an unexpected uptick in January, increasing pressure on the Federal Reserve to maintain its pause on rate cuts. Meanwhile, U.S. President Donald Trump criticized his predecessor, Joe Biden, for the worse-than-anticipated inflation figures.
The consumer price index (CPI) edged up to 3% in January from a year ago, rising slightly from 2.9% in December, the Labor Department said in a statement on Wednesday. This was slightly above the median forecast of 2.8% predicted by economists surveyed by Dow Jones Newswires and The Wall Street Journal.
The data will likely fuel calls for the Fed—the independent U.S. central bank—to hold its key lending rate at between 4.25% and 4.5% as it waits for prices to ease. Another worrying data point for the Fed in the data published Wednesday was the slight uptick in annual inflation excluding volatile food and energy costs, which also accelerated slightly to 3.3%.
On a monthly basis, inflation increased by 0.5% in January, and by 0.3% excluding food and energy.
‘Biden inflation up’
The Fed has a long-term inflation target of 2%, measured against a different inflation gauge, and aims to hit it primarily by raising and lowering short-term interest rates. These actions influence the cost of borrowing for consumers and businesses alike.
However, U.S. President Donald Trump has been pushing the Fed to cut interest rates, as he stated just before the inflation figures were announced on Wednesday. “Interest rates should be lowered, something that would go hand in hand with the upcoming tariffs,” Trump wrote on his Truth Social account.
Shortly after the figures were announced, Trump blamed his predecessor Joe Biden for last month’s unexpected acceleration in consumer inflation, as he looked to deflect a moment of potential political peril early in his second term. “BIDEN INFLATION UP!” Trump wrote on Truth Social, seeking to blame Biden for the CPI figures, which included 12 days in which Trump was in office.
“It’s far worse than I think anybody anticipated, because unfortunately, the previous administration was not transparent in where the economy truly was,” White House Press Secretary Karoline Leavitt told reporters in Washington later Wednesday.
