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Justifying the caution predicated by the monetary authorities, the last January numbers on inflation in the United States were higher than anticipated. Last week, the Labor Department informed the Consumer Price Index was 3.1 percent higher in January from a year earlier, less than 3.4 percent in December. A slight decline, but higher than 2,9 percent anticipated by some Wall Street analysts, which was expected to justify lowering interest rates by the central bank.
Disappointed, the markets went down, with the Dow Jones index falling 1.4 percent, because interest rates would not be lowered by the central bank at its next meeting in March, and if the vigorous indicators persist, neither would they be lowered at the following meeting in May.
Moreover, other indicators of strength were available, such as the vigorous creation of more than 350,000 new jobs in January, together with the fact that also in January the sharpest price increases were in the stickier services sector. Both indicators confirmed that cautiousness will prevail. As stated by the Open Market Committee, at the end of its last meeting in January, they want to gain “greater confidence that inflation is moving sustainably toward 2 percent.” https://www.federalreserve.gov/newsevents/pressreleases/monetary20240131a.htm
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
