Inflation in January

Annual inflation in the US in January this year rose at the fastest rate in 40 years, up 7.5% from the same period in 2021. In monthly terms, consumer prices rose 0.6%, according to data released by the US Department of Labor on Thursday.

Experts polled by Bloomberg reporters had expected an annual inflation rate of 7.3 per cent. Last December's increase was 7 per cent.

The Fed and its chairman Jerome Powell have abruptly abandoned the ultra-low interest rate policy the Fed had been pursuing since a pandemic devastated the economy in March 2020.

A fortnight ago, Powell made it clear that the central bank would likely raise the benchmark short-term rate several times this year, with the first increase almost certainly coming in March. Investors have priced in at least five rate hikes for 2022.

However, steadily rising prices have made many Americans less able to afford food, petrol, rent, childcare and other necessities.

This is the eighth consecutive month of inflation above the 5% mark in the US. According to analysts, such price increases would lead the country's Federal Reserve, which acts as the central bank, to raise its benchmark interest rate ahead of schedule.