Inflation picked up in January. Here’s what it means for your money.

Inflation accelerated in January, rising 3% on an annual basis, indicating that the Federal Reserve’s push to drive inflation down to a 2% annual rate has stalled out, at least temporarily.

By the numbers

The Consumer Price Index was forecast to rise 2.9% last month, according to economists polled by financial-data firm FactSet. The CPI, a basket of goods and services typically bought by consumers, tracks the change in those prices over time. 

What economists say

Recent sticky inflation data backs the Federal Reserve’s decision last month to hit the brakes on additional rate cuts, economists say. On Feb. 11, Fed Chair Jerome Powell told the Senate Banking Committee that the central bank does “not need to be in a hurry” to pare rates further. 

What it means for your money

Higher borrowing costs for longer: With the Fed pausing on additional rate cuts, consumers are likely to face higher borrowing costs for longer for everything from credit cards to personal loans.

“The Fed recently opted to interrupt a string of interest rate cuts, and many observers think the Fed might be in wait-and-see mode for months,” Bankrate senior economic analyst Mark Hamrick in a statement. 

In:
• Inflation