An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago.
WASHINGTON — An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.was the largest year-over-year rise since 1982. Excluding volatile food and energy prices, core inflation increased 5.2% in January from a year earlier.
Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia’s invasion likely disrupting oil and gas exports. The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, have also increased.President Joe Biden said Thursday that he would do “everything I can” to keep gas prices in check. Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation’s strategic reserves.
Fed officials are acknowledging that the invasion of Ukraine has complicated the economic outlook, but say that so far they are sticking with their plans for rate hikes. In December, Fed officials projected that inflation would decline to just 2.7%, according to their preferred measure, by the end of this year, which most economists see as increasingly unlikely. The Fed will release updated projections at its March meeting.January’s data show inflation was already picking up before the invasion. From December to January, prices rose 0.6%, up from 0.5% in the previous month.
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