Inflation cools to 2.4%, closer to Fed's target
Newsy
Inflation eased to 2.4% in January, the lowest in 8 months, raising speculation the Fed may revisit its steady interest rate stance in March.
The consumer price index showed that prices for the 12 months ending in January increased by 2.4%, which marked the lowest 12-month inflation rate in the U.S. since last May, according to the Bureau of Labor Statistics.
Since 2000, the average annual inflation rate has been 2.1%. The Federal Reserve’s target inflation rate is 2%, but inflation well below that level has often signaled an economic recession.
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The consumer price index weighs the costs of goods by their importance, with items such as food, shelter and energy carrying more weight. As of the end of last month, food prices rose 2.9%, energy costs remained stable and shelter costs climbed 3%.
Economists had warned that tariffs implemented by President Donald Trump could significantly drive up inflation, but recent data show no substantial increase in consumer prices tied to those tariffs. Yale University’s Budget Lab reported in November 2025 that tariffs added about $1,400 to annual expenses for the median U.S. household, with costs varying by income. Clothing, electronics and metal goods were among the most impacted categories, the report said.
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Inflation eased to 2.4% in January, the lowest in 8 months, raising speculation the Fed may revisit its steady interest rate stance in March.
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