• Inflation Accelerates Beyond Expectations:
  The Consumer Price Index (CPI) rose 3.0% YoY, exceeding December’s 2.9% increase. On a monthly basis, CPI jumped 0.5%, surpassing forecasts of 0.3%.

• Core Inflation Rebounds:
  Stripping out food and energy, core CPI climbed 3.3% YoY, marking an uptick from December’s 3.2%. This suggests underlying inflationary pressures remain strong, challenging expectations for a smooth disinflation path.

• Food & Energy Prices Add Pressure:

       Egg prices soared 15.2%—the biggest jump since 2015—driving grocery costs higher.

       Rising fuel prices contributed to inflation stickiness, affecting transportation and logistics costs.

• Market Reactions Across Asset Classes:
  US Stocks: S&P 500 futures dipped as investors reassessed the timing of potential Fed rate cuts.
  Bonds: Treasury yields ticked higher as traders scaled back expectations for aggressive easing by the Fed.
  FX Markets: The US dollar strengthened amid concerns that inflation could keep interest rates elevated for longer.

• Trump’s Tariffs & Inflation Risks:
  President Trump announced 25% tariffs on steel and aluminum, along with upcoming duties on Mexico and Canada, fueling concerns of renewed inflationary pressures.

   If tariffs raise import costs, inflation could remain sticky, complicating the Federal Reserve’s path for rate adjustments

• What’s Next?

Inflation surged higher than expected, raising concerns about whether this is a temporary spike or a longer-term threat.

With Trump’s tariffs set to drive up import costs, the Fed faces a tough dilemma—cut rates and risk reigniting inflation or hold steady and slow the economy.