Washington – American inflation may be slightly cooled last month, but it may be a small intensive as President Donald Trump’s tariff is widely expected to increase prices in the coming months.
According to economists surveyed in the survey by FactSet, the Labor Department report on Wednesday hoped that the Consumer Price Index in February increased by 2.9% from a year ago. This will be slightly below 3% in January and the first decline in five months. It fell at a 3 1/2 year low of 2.4% in September.
Core prices, which exclude unstable food and energy categories, are also expected to slip up to 3.2% below 3.3% in January. Economists watch the main prices closely because they often read a better reading where inflation is led.
Nevertheless, both measures have been largely stuck on the levels that reached the last summer, when a return to inflation came to a great extent after its peak declining in June 2022. Stuborn inflation will create political problems for Trump, who as a candidate “promised to knock hell out of inflation.”
And with the implementation of Trump – or threatening to impose – a wide range of tariffs on imports from Canada, Mexico, China, Europe and India, most economists will increase the chances of this year’s price increase.
“There is no real progress towards that 2% target” “I suspect that you are going to start to see the number of inflation.”
On Wednesday’s update, inflations in the Federal Reserve are unlikely to transfer their major interest rates to cut their major interest rates, which had reduced three times last year that inflation was disappearing. Fed Chair Jerome Powell said in January that the rate was being cut and there is no more likely to reduce in the Fed meeting next week.
On a monthly basis, both the headline and core prices are estimated to increase by 0.3% in February to February from last month. This will be an improvement from January, when overall inflation increases by 0.5%, but grows at the speed that is still very large to achieve inflation on an annual basis at 2% target of the Fed.
The largest wild card for the Fed – and the economy as a whole is to apply more to the threats of tariffs and trump. Since its inauguration in January, Trump has imposed 20% tax on all imports from China, and implemented 25% of duties on imports from Canada and Mexico, although most of those tariffs have been suspended for one month.
On Wednesday, the administration increased the tariffs on all steel and aluminum imports by 25%, promising that taxes will help generate American factory jobs when Tram is shocking the stock markets and increasing the fear of economic recession.
The European Union responded almost immediately, announcing retaliatory trade action with new duties on American industrial and agricultural products.
Trump has promised mutual duties on countries that export on April 2 from the United States including Europe, India and South Korea.
Duties have cried to financial markets and can slow the economy, some analysts have increased the chances of recession.
Economists of Yale Budget Lab calculate that mutual tariffs, by themselves, can increase the average American tariff rate to its highest level since 1937, and can spend the average house as $ 3,400.
In addition to tariffs, some things, such as egg prices, expects to be even more expensive last month, increasing inflation. Avian Flu has forced farmers to kill more than 160 million birds, including 30 million in January. Average egg prices in February $ 4.95 were a dozen nationwide, which is high. The price for decades before the disease was less than $ 2 consecutive dollars.
Economists will also closely look at new and used cars, auto insurance, airline tickets and rental prices among other items, where inflation can be led. Gas prices are expected to fall last month.
According to the textbooks of economics, tariffs, usually expected to result in prices only one time increase, but not necessarily inflation is going on. Treasury Secretary Scott Besent made the case in a comment in New York’s Economic Club last week, while admitting that prices could be higher.
“We can get one time price adjustment,” he said. “Access to cheap goods is not the essence of American dreams.”
But Fed Chair Jerome Powell noted on Friday that tariffs could spoil inflation in some cases – for example, if they were applied as a “chain” of price increase, consumers expected to move inflation higher.
“What exactly does what is happening with long -term inflation expectations, Powell said. Powell said that the short -term expectations for rising prices have increased, partially out of concern about tariffs, although long -term expectations have been stable.
Even the perception that prices will increase, can ignite inflation if homes and business change their behavior ahead of time to offset the increase in prices. Some companies can start charging customers if they expect an increase in their cost, for example.
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In Washington, AP Writers Josh Bok and Paul Vicman, and Lorne Cook and David McHug in Europe contributed to the report.
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