US wholesale prices surged higher than anticipated in January, signaling a potential stall in the progress against inflation. This unexpected increase, coupled with rising consumer prices, casts doubt on expectations for interest rate cuts this year.
FILE - Shoppers guide their carts through the milk display in a Costco warehouse Thursday, Jan. 23, 2025, in Sheridan, Colo. WASHINGTON — U.S. wholesale prices came in hotter than expected last month at a time when progress against inflation appears to have stalled, undercutting expectations for lower interest rates this year.
Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably health care and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index. Then the improvement on inflation stopped. Year-over-year consumer price inflation has now risen for four straight months.
INFLATION WHOLESALE PRICES FEDERAL RESERVE INTEREST RATES ECONOMIC OUTLOOK
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