US inflation rose 3.1% in January, a hotter-than-expected increase that further stokes doubts as to whether the Federal Reserve will begin cutting interest rates this spring.
Last month’s Consumer Price Index — which tracks changes in the costs of everyday goods and services — came in higher than the 2.9% figure economists had expected, according to FacfSet.
Core CPI — a number that excludes volatile food and energy prices — increased 0.4% in January, to 3.9%, after rising 0.3% in December. The figure, a closely-watched gauge among policymakers for long-term trends, was also higher than what economists at FactSet expected.
Dow futures were poised to drop early Tuesday as traders began to unwind bets that the Fed will begin easing rates sooner rather than later.
The latest inflation figure marks a cooldown from December’s stiffer-than-expected 3.4% gain, which dampened hopes on Wall Street that the first of three highly-anticipated interest rate cuts this year could come as soon as March.
“The question is whether or not May 1 remains a possibility if the next series of inflation related data do not edge lower than expected,” said LPL Financial’s chief global strategist, Quincy Krosby.
“This could easily be a one off. But for all those people saying rates are too high, he’s got to cut now,” Chris Zaccarelli, chief investment officer of Independent Advisor Alliance, said of Fed Chair Jerome Powell. “What are we waiting for? This is why. This is exactly what Powell was worried about.”
The Bureau of Labor Statistics attributed the CPI’s increase to the shelter index, which rose 0.6% on a monthly basis and contributed to two-thirds of the monthly all-items increase. The food index increased 0.4% in January, more than the 0.2% it advanced in December.
The gas index, meanwhile, experienced a handsome 3.3% drop, offsetting increases in the electricity and natural gas indexes, the federal agency said. As of Tuesday, the average price for a gallon of gas in the US is $3.23, according to AAA data.
The Bureau of Labor Statistics’ latest CPI report underscores that cash-strapped Americans, who are still dealing with retail prices far above where they were before the pandemic.
Hopes for rate cuts also took a hit with the January jobs report showing the labor market is booming, with US employers adding a staggering 353,000 jobs last month.
The figure blew past the 185,000 jobs economists expected, as the unemployment rate remained steady at 3.7% for the third month in a row.
Januarys jobs report was the first major piece of economic data since the Federal Reserves latest policy meeting, when central bankersunanimously decided to keep interest rates at their current 22-year high, between 5.25% and 5.5%.
Considering the jobs report and the CPI, the Fed still “doesnt have a coherent set of criteria for cutting, so for all we know this resets the clock,” according to Subadra Rajappa, Societe Generale’s Head of US Rates Strategy.
“If cutting is a confidence game, we dont know when enough progress is enough or whether mild setbacks undermine their confidence.”
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Meanwhile, President Joe Biden has addressed the issue of “shrinkflation” — when businesses cut product sizes but keep prices the same — in a video posted on X ahead of Super Bowl LVIII.
Biden called the practice “a rip-off.”
Im calling on companies to put a stop to this. Lets make sure businesses do the right thing now, he said, though he didn’t offer a solution or policy to address the practice.
Senator Bob Casey in December released a report that showed the impact of smaller product sizes on everything from toilet paper to Oreos.
The report noted that household paper products were 34.9% more expensive per unit than they were in January 2019, with about 10.3% of the increase due to producers shrinking the sizes of rolls and packages.
It said the price of snacks like Oreos and Doritos had gone up 26.4% over the same period, with shrinking portions accounting for 9.8% percent of the increase.
Although inflation appears to be slowing, the economy remains Americans overall top concern, cited by 22% of poll respondents, as they have struggled with inflation and other aftershocks of the COVID-19 pandemic, according to a Reuters/Ipsos poll released last month.
Since taking office, Biden has made a pitch for lower supermarket prices, pushed drug makers to lower insulin costs, hotel chains to reduce fees and tried to diversify the meat-packing industry after beef prices skyrocketed in the aftermath of the pandemic.
It’s 5.30am, but the car park outside a laundrette in south central Los Angeles is already bustling.
A woman is setting up a stand selling tacos on the pavement and the sun is beginning to rise behind the palm trees.
A group of seven women and two men are gathered in a circle, most wearing khaki green t-shirts.
The leader, a man named Francisco “Chavo” Romero, begins by asking how everyone is feeling. “Angry,” a few of them respond. “Proud of the community for pushing back,” says another.
Ron, a high school history teacher, issues a rallying cry. “This is like Vietnam,” he says. “We’re taking losses, but in the end we’re going to win. It’s a war.”
Image: Francisco ‘Chavo’ Romero leads a volunteer group, attempting to warn people ahead of ICE raids
This is what the resistance against Donald Trump’s immigration policy looks like here. In the past month, immigration and customs enforcement agents – known as ICE – have intensified their raids on homes and workplaces across Los Angeles.
Since the beginning of June, nearly 2,800 undocumented immigrants have been arrested in the city, according to the Department of Homeland Security. The previous monthly high was just over 850 arrests in May this year.
Image: Police use tear gas against protesters, angry at a recent immigration raid at a farm in Camarillo, California. Pic: AP
Videos have circulated online of people being tackled to the ground in the car park of DIY shops, in car washes and outside homes. The videos have prompted outrage, protests and a fightback.
“Chavo” and Ron belong to a group of organised volunteers called Union del Barrio. Every morning, a group of them meet, mostly in areas which have high immigrant populations.
The day I meet them, they’re in an area of LA which is heavily Latino. Armed with walkie talkies to communicate with each other, megaphones to warn the community and leaflets to raise awareness they set out in cars in different directions.
Image: A volunteer from Union del Barrio shows Sky’s Martha Kelner how they try to stay one step ahead of ICE agents
They’re looking for cars used by ICE agents to monitor “targets”.
“That vehicle looks a little suspicious,” says Ron, pointing out a white SUV with blacked-out windows, “but there’s nobody in it”.
An elderly Latino man is standing on a street corner, cutting fruit to sell at his stall. “He’s the exact target that they’re looking for,” Ron says. “That’s what they’re doing now. The low-hanging fruit, the easy victim. And so that is proving to be more successful for their quotas.”
Image: This man, selling fruit on a street corner in LA, is a potential target of immigration agents
In the end, it turns out to be a quiet morning in this part of LA, no brewing immigration operations. But elsewhere in the city, dawn raids are happening.
ICE agents are under pressure from the White House to boost their deportation numbers in line with Donald Trump’s campaign promise to crack down on illegal immigration.
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In June, tear gas and rubber bullets were fired at protestors demonstrating against immigration raids
Maria’s husband Javier was one of those arrested in LA. He came to the United States from Mexico when he was 19 and is now 58.
The couple have three grown-up children and two grandchildren. But Javier’s work permit expired two years ago, according to Maria and so he was living here illegally.
Image: Maria’s husband Javier was arrested after his work permit expired
She shows me a video taken last month when Javier was at work at a car wash in Pomona, an area of LA. He is being handcuffed and arrested by armed and masked ICE agents, forced into a car. He is now being held at a detention centre two hours away.
“I know they’re doing their job,” she says, “but it’s like, ‘you don’t have to do it like that.’ Getting them and, you know, forcing people and pushing them down on the ground. They’re not animals.”
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US troops accused of ‘political stunt’ after park raid
Maria wipes away tears as she explains the impact of his absence for the past four weeks. “It’s been so hard without him,” she says. “You feel alone when you get used to somebody and he’s not there any more. We’ve never been apart for as long as this.”
The family have a lawyer and is appealing for him to remain in the US, but Maria fears he will be sent back to Mexico or even a third country.
Image: Maria fears her husband, who has lived in the US for nearly 40 years, will be sent back to Mexico
“I don’t know what to say to my grandkids because the oldest one, who is five was very attached to his papas, as he calls him. And he’s asking me, ‘When is papa coming home?’ and I don’t know what to say. He’s not a criminal.”
The fear in immigrant communities can be measured by the empty restaurant booths and streets that are far quieter than usual.
Image: People in LA are being asked to report sightings of ICE officials so others can be warned
I meet Soledad at the Mexican restaurant she owns in Hollywood. When I arrive, she’s watching the local news on the TV as yet another raid unfolds at a nearby farm.
She’s shaking her head as ICE agents face off with protesters and military helicopters hover overhead. “I am scared. I am very scared,” she says.
All of her eight employees are undocumented, and four of them are too scared to come into work, she says, in case they get arrested. The process to get papers, she says, is too long and too expensive.
Image: Soledad, who owns a Mexican restaurant, plans to hide her illegal workers if immigration officials arrive
“They call me and tell me they are too afraid to come in because immigration is around,” she says.
“I have to work double shifts to be able to make up for their hours, and yes, I am very desperate, and sometimes I cry… We have no sales, and no money to pay their wages.”
There is just one woman eating fajitas at a booth, where there would usually be a lunchtime rush. People are chilled by the raids.
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Soledad says she plans to hide her illegal workers if immigration officials arrive.
“I’ve told them, get inside the fridge, hide behind the stove, climb up where we have a space to store boxes, do not run because they will hunt you down.”
The White House says they’re protecting the country from criminals. ICE agents have been shot at while carrying out operations, their work becoming more dangerous by the day.
The tension here is ratcheting up. Deportation numbers are rising too. But the order from Donald Trump is to arrest even more people living here illegally.
Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show in Paris on June 11, 2025.
Chesnot | Getty Images Entertainment | Getty Images
Nvidia CEO Jensen Huang has downplayed U.S. fears that his firm’s chips will aid the Chinese military, days ahead of another trip to the country as he attempts to walk a tightrope between Washington and Beijing.
In an interview with CNN aired Sunday, Huang said “we don’t have to worry about” China’s military using U.S.-made technology because “they simply can’t rely on it.”
“It could be limited at any time; not to mention, there’s plenty of computing capacity in China already,” Huang said. “They don’t need Nvidia’s chips, certainly, or American tech stacks in order to build their military,” he added.
The comments were made in reference to years of bipartisan U.S. policy that placed restrictions on semiconductor companies, prohibiting them from selling their most advanced artificial intelligence chips to clients in China.
Huang also repeated past criticisms of the policies, arguing that the tactic of export controls has been counterproductive to the ultimate goal of U.S. tech leadership.
“We want the American tech stack to be the global standard … in order for us to do that, we have to be in search of all the AI developers in the world,” Huang said, adding that half of the world’s AI developers are in China.
That means for America to be an AI leader, U.S. technology has to be available to all markets, including China, he added.
Washington’s latest restrictions on Nvidia’s sales to China were implemented in April and are expected to result in billions in losses for the company. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.
Last week, the Nvidia CEO met with U.S. President Donald Trump, and was warned by U.S. lawmakers not to meet with companies connected to China’s military or intelligence bodies, or entities named on America’s restricted export list.
According to Daniel Newman, CEO of tech advisory firm The Futurum Group, Huang’s CNN interview exemplifies how Huang has been threading a needle between Washington and Beijing as it tries to maintain maximum market access.
“He needs to walk a proverbial tightrope to make sure that he doesn’t rattle the Trump administration,” Newman said, adding that he also wants to be in a position for China to invest in Nvidia technology if and when the policy provides a better climate to do so.
But that’s not to say that his downplaying of Washington’s concerns is valid, according to Newman. “I think it’s hard to completely accept the idea that China couldn’t use Nvidia’s most advanced technologies for military use.”
He added that he would expect Nvidia’s technology to be at the core of any country’s AI training, including for use in the development of advanced weaponry.
A U.S. official told Reuters last month that China’s large language model startup DeepSeek — which says it used Nvidia chips to train its models — was supporting China’s military and intelligence operations.
On Sunday, Huang acknowledged there were concerns about DeepSeek’s open-source R1 reasoning model being trained in China but said that there was no evidence that it presents dangers for that reason alone.
Huang complimented the R1 reasoning model, calling it “revolutionary,” and said its open-source nature has empowered startup companies, new industries, and countries to be able to engage in AI.
“The fact of the matter is, [China and the U.S.] are competitors, but we are highly interdependent, and to the extent that we can compete and both aspire to win, it is fine to respect our competitors,” he concluded.
And today, Musk made it official that he will seek greater collaboration between three of his companies: Tesla, xAI, and twitter, in the form of an investment into xAI by Tesla.
The situation is a little more complicated than that, though.
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Tesla is a public company, owned by shareholders. Musk is the largest shareholder, but only owns around 12% of the company himself.
This is a different situation than xAI, which is a private company, owned by Musk. While there are other investors, he can exercise much more direct control over the company, and doesn’t have to put big decisions up to a vote.
One of the recent decisions he made with xAI was to purchase twitter in March. You may say, “wait, I thought he bought twitter back in 2022?,” and you’d be correct. Musk purchased twitter for $44 billion in 2022, which was widely agreed to be far too high a price, and then rapidly saw the company’s valuation drop to under $10 billion.
Then, in March 2025, Musk had xAI purchase twitter in an all-stock deal, valuing twitter company at $45 billion – again, far too high of a valuation, but considering he purchased the company from himself, he could set the price at whatever he wanted.
The move was widely considered to be a bailout of twitter, and the numbers involved considered arbitrary, perhaps partially to help save face for Musk after he made one of the worst business deals of all time.
Now the two are the same entity, and it seems clear that he would like to bring Tesla into the fold, in some way or another.
Musk has already improperly used resources from Tesla, a public company, to boost xAI and twitter, his private companies. Last year, he gave up Tesla’s priority position for highly sought-after NVIDIA H100 GPUs, instead shipping those GPUs to xAI and twitter. Tesla could have used these GPUs for training its FSD/Robotaxi systems, which Musk has claimed is the most important thing to Tesla’s future, but instead graciously sent them to his other company that used them to, uh, train a bot to say Nazi stuff apparently.
xAI has also poached talent from Tesla, multiple times, showing how Musk is using Tesla as a farm team for his private company.
So it hasn’t been a secret that Musk would like to use public money to bail out his private companies, as he’s been setting the stage for for a while now.
Musk has previously “discussed” getting Tesla to invest in xAI in the past, but the idea was never made official until today, when Musk said that he will put the idea to a shareholder vote.
In response to one of his superfans asking for the the opportunity to waste money on an overvalued social media app (which would mark the third time it has been overpaid for in as many years), and the backend fueling “MechaHitler,” Musk said this:
Tesla traditionally holds its annual shareholder meeting around the middle of the year, so if it were a normal year, this shareholder vote might be imminent.
But it’s not a normal year, as just last week Tesla announced an exceptionally late shareholder meeting, pushing it back to November, the latest it has ever held the meeting.
This means that Musk will have around four months to campaign for this idea – something that he’ll perhaps have more time to do, now that he’s no longer cosplaying as a government official.
We don’t know what the structure of the deal might look like yet, but Musk has been clear in the past that he wants more shares in Tesla. After selling many of his shares in order to buy twitter, he later complained that he doesn’t feel comfortable having less than 25% of Tesla. Given that his recent xAI/twitter deal was an all-stock deal, Musk could attempt to fund any investment of Tesla into xAI via shares, giving himself more Tesla shares in exchange for the company gaining a portion of xAI. Though to get him to 25% voting shares in Tesla, that would require either an enormous valuation for xAI, a small valuation for Tesla, or purchasing a large percentage of xAI (or, perhaps, all three, given how much higher TSLA’s valuation is than xAI’s).
We may however have a hint as to how that vote will go, because the last time Musk campaigned for a clearly terrible idea, Tesla shareholders ate it up.
In mid-2024, Musk ended his yearslong absenteeism at Tesla in a flurry of activity, hoping to persuade enough shareholders to vote for his illegal $55B pay package.
So it looks like we’ve got another campaign coming up, and if last time was any indication, expect some really bad decisions along the way. It worked last time, didn’t it?
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