Inflation probably eased for a seventh month straight in January, but interest rates will keep rising — because the Federal Reserve isn’t done with its campaign to root abnormally high prices out of the economy.
The report showed January prices rose 0.5 percent in comparison with the previous month, a bump from the 0.1 percent rise in the December report, and a less-than-encouraging sign for economists and policymakers who argue that progress is best measured month by month.
The markets were muted before Tuesday’s opening, with futures on the Dow Jones industrial average, S&P 500 and Nasdaq tipping slightly into the red. The energy index rose 2 percent over December, and the gasoline index increased 2.4 percent. Motor vehicle insurance also was up, along with the cost of clothing, household furnishings and recreation. New-car prices were up 0.2 percent.
The past few months have bolstered confidence that encouraging inflation reports last fall really did represent the start of a trend and that the economy doesn’t appear to be barreling toward a recession — yet. The labor market in particular continues to show remarkable strength, with employers addingBut the Fed keeps repeating that
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