The Labor Department is due to release its consumer price index (CPI) on Tuesday and unveil monthly inflation data that could Do it or don’t the US economy.
If inflation gets too hot, the Federal Reserve may decide to step on the gas again and announce major rate hikes designed to slow the economy and reduce demand for goods and services.
The Fed is likely cautious after the Labor Department last week revised its inflation numbers upwards for the past few months. These changes showed that prices rose 0.1 percent from November to December instead of falling 0.1 percent.
The central bank recently committed to smaller rate hikes based on the premise that inflation eases. But the revisions show that the Fed hasn’t made as much progress in fighting inflation as it once thought it would.
Fed Governor Michelle Bowman said Monday that the Fed must do so Comply with hiking tariffs to “better balance supply and demand”.
Continued rate hikes would spell bad news for markets and the broader US economy, increasing the risk of a recession. But Fed officials are sticking to their goal of bringing inflation down to 2 percent, even as more than 1 million people lose their jobs.
Analysts predict that annual inflation will come to 6.2 percent in January after 6.5 percent in December, while prices are expected to increase by 0.5 percent month-on-month. This means an acceleration compared to the previous months.
The employment office is Changing the CPI calculation for the January report by a greater emphasis on the housing market and less on used cars, which could lead to a higher reading. Tobias Burns from The Hill has the details in this story.
Key business and economic news impacting this week and beyond:
President Joe Biden is pursuing an aggressive economic agenda aimed at increasing worker power, taxing the rich, lowering fees and taking on dominant corporations. But with Republicans in control of the House of Representatives — and eager to block the president’s wish list — Biden has no way of implementing many of the economic reforms announced in his State of the Union address, including a 4 percent tax on stock buybacks, a wealth tax…
Battle lines have emerged in the battle for the next Labor Secretary, a crucial decision for President Biden, who is stepping up his efforts to target workers before 2024 Minister Marty Walsh, Biden will finally bring an Asian American into his cabinet by replacing Deputy Secretary Julie Su promoted. But ex-speaker Nancy Pelosi (D-Calif.) has…
Capitol Hill is talking more about Social Security, which is estimated to be in default in just over a decade as the two sides bicker over how to tackle the rising national debt. A recent report from the Congressional Budget Office (CBO) found that spending on Social Security benefits increased 10 percent, or $37 billion, in the four months ended January, compared to the same period in which…
Upcoming news topics and events we’re watching:
The work department will release its highly anticipated release consumer price indexwhich measures inflation, Tuesday at 8:30 a.m. ET.
The Congressional Budget Office will publish its updated version 10-year budget and economic outlook Report on Wednesday at 2 p.m. It will also include his latest expectation of when the Treasury Department will phase out its “extraordinary measures” to stave off a federal default without action from Congress.
The Senate Finance Committee will hold a hearing at 10:30 a.m. Wednesday to consider President Biden’s nomination Danny Werfel to serve as IRS chief.
Branch out to more stories of the day:
DETROIT (`) — Ford Motor Co. plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to produce lower-cost batteries for a variety of new and existing electric vehicles. The plant, to be built about 100 miles west of Detroit on land being prepared for industrial development, would begin manufacturing batteries in 2026. It would produce enough batteries to power 400,000 vehicles per…
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