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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.

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Politics

Wes Streeting denies Labour has made ‘mistakes’ with ‘unpopular’ policies despite poor local election results

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Wes Streeting denies Labour has made 'mistakes' with 'unpopular' policies despite poor local election results

Health Secretary Wes Streeting has defended “unpopular” policies such as the cut to the winter fuel allowance despite Labour’s poor performance at the local elections.

Mr Streeting denied the government had made any mistakes when asked whether the policy was partly to blame for the party losing 189 council seats less than a year since the General Election.

Since coming into government last July, Labour has enacted a number of policies that were not in its manifesto.

These include means-testing winter fuel payments for pensioners, increasing employers’ national insurance contributions and slashing £5bn from the welfare bill.

Asked what mistakes his government had made so far that had led to its drubbing at the ballot box, Mr Streeting told Sunday Morning with Trevor Phillips: “Well, we will make plenty of mistakes.”

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Pressed again on whether he believed “mistakes” had been made, the health secretary replied: “No. When we made those choices, we knew they would be unpopular. And we knew that they would be opposed.

“The reason we made those choices is because we genuinely believe they’re the right choices to get the country out of the massive hole it was left in. And right across the board. Whether it’s the NHS, whether it’s schools, whether it’s prisons, whether it’s our defence and security, whether it’s crime and policing, there were enormous challenges facing this country when we came in.

“And we’ve had to make big and sometimes unpopular decisions so that we can face those challenges and deal with them. People might thank us if we just kind of go for the easy but we want to make the right choices.”

Some Labour MPs have urged the government to change direction, with one telling Sky News the cut to winter fuel was a “catastrophic error” that must be “remedied” if the party is to see any improvement in public opinion.

Others have warned that in courting Reform voters, the party risks fracturing its coalition of voters on the left who may be tempted by the Liberal Democrats and Green Party.

However, in the aftermath of the local elections, Sir Keir Starmer suggested the poor results meant he needed to go “further and faster” in delivering his existing agenda.

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Inside Reform’s election success

The real victor to emerge from Thursday’s local elections was Reform UK, which won control of 10 councils and picked up 677 council seats largely at the expense of the Conservatives in the south.

However, Reform also won the Runcorn by-election from Labour by just six votes, as well as control of Doncaster Council from Labour – the only local authority it had control of in this set of elections – in a significant win for Nigel Farage and his party.

The Reform UK leader declared that two-party politics was now “finished” and that his party was now the official “opposition” to Labour.

Asked whether the results meant that Labour would now treat Reform as “your most serious opposition”, Mr Streeting said: ” I certainly do treat them as a serious opposition force.”

“As I say, I don’t know whether it will be Reform or the Conservatives that emerge as the main threat,” he added.

“I don’t have a horse in that race, but like alien versus predator, I don’t really want either one to win.”

Read more:
Reform’s mission to ‘remoralise’ young people
Reform has put the two traditional parties on notice

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Reform UK are ‘fighting force’

Tory Party chairman Nigel Huddleston said Reform UK was not just a protest party and that Mr Farage was “a force in British politics”.

He told Trevor Phillips: “But the one thing about Nigel Farage is, and we’re seeing this again and again and again, he is a populist.

“He is increasingly saying everything that anybody wants to hear. He’s trying to be all things to all men.”

“We are establishing ourselves as a credible alternative government based on sound conservative principles and values and our values and our principles, and therefore our policies, will define the future of our party,” he added.

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Environment

It’s back: Hyundai IONIQ 5 qualifies for $7,500 tax credit – again!

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It's back: Hyundai IONIQ 5 qualifies for ,500 tax credit – again!

The Hyundai IONIQ 5 got a raft of upgrades and sporty, rally-focused XRT trim level for 2025 – but the biggest upgrade for the Made in America Hyundai might be this: the 5 has regained eligibility for the full $7,500 federal EV tax credit!

Despite being assembled at Hyundai’s Georgia meta plant for the last four month, the 2025 Hyundai IONIQ 5 was nowhere to be found on the EPA’s list of rebate-eligible vehicles. But that was then – with a fresh updated to the list coming online May 1st, Hyundai’s new-age electric hot hatch is back in the rebate game.

It’s worth noting that lease customers had been able to access the incentive under some circumstances, but this latest update to the EPA list makes it possible for cash and payment buyers to take advantage of the full Federal incentive, too – as long as they earn less than $300,000 as a married couple filing jointly, less than $225,000 as a head of household, or less than $150,000 as an individual.

With the $7,500 federal tax credit in the equation, you can get a new 2025 IONIQ 5 for somewhere in between $36,575 and $49,475, well under the $80,000 Federal MSRP cap.

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Victory lap

As if to celebrate, Hyundai announced that it was taking on the celebrate One Lap of America road rayy and race event in a factory collaboration with the track-focused enthusiasts at Grassroots Motorsports this week with One Lap veterans Andy Hollis and Tom Suddard campaigning a stock, 601 hp 2025 Hyundai IONIQ 5 N in the Alternative Fuels class.

“After winning our class in a gutted, caged race car last year, we wanted to compete in the best-of-all worlds this year: A vehicle that’s incredibly fast, incredibly comfortable on a road trip, and incredibly capable on a racetrack,” explains Suddard. “Electrification means it’s finally possible to have huge power without huge compromises in a street car, and the IONIQ 5 N promises to pair that huge power with the durability and capability to survive a week of racing.”

One Lap is widely regarded as one of the toughest street-legal motorsports events in the world, pitting amateur and professional drivers alike compete in stock and heavily modified vehicles of every description, battling it out in a series of scored challenges, including timed events at road courses, drag strips, skid pads, and autocross courses.

In between tracks, competitors safely travel thousands of miles around the country, proving the mettle and durability of the vehicles and the teams that drive them. This year, 86 teams from all over the country will compete in 17 scored events over the course of eight days at tracks like Virginia International Raceway and NCM Motorsports Park.

The Tire Rack One Lap of America is currently underway – you can track the Hyundai’s progress here, then let us know what you think of this new tax development in the comments.

SOURCES | IMAGES: Hyundai, One Lap of America; FuelEconomy.gov.


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Politics

It is ‘feasible’ Nigel Farage could be the next prime minister, says Kemi Badenoch

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It is 'feasible' Nigel Farage could be the next prime minister, says Kemi Badenoch

Kemi Badenoch has admitted it is “feasible” that Nigel Farage could become the next prime minister.

The Tory leader told the BBC’s Sunday With Laura Kuenssberg programme Mr Farage’s party was “expressing the feeling of frustration that a lot of people around the country are feeling” – but added it was her job to “come up with answers and solutions”.

Asked if it was feasible that Mr Farage could be the next prime minister, she cited how Australian Prime Minister Anthony Albanese had won re-election this weekend.

“As I said, anything is feasible,” she said. “Anthony Albanese: people were writing him off. He has just won a landslide, but my job is to make sure that he [Farage] does not become prime minister because he does not have the answers to the problems the country is facing.”

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Could Nigel Farage be prime minister?

Asked what Mr Farage was doing right, Ms Badenoch said: “He is expressing the feeling of frustration that a lot of people around the country are feeling.

“But he also doesn’t have a record in government like the two main parties do. Now he’s going to be running some councils. We’ll see how that goes.”

Mr Farage was the undoubted winner of Thursday’s local elections, in which 23 councils were up for grabs.

His party picked up 677 council seats and took control of 10 councils.

By contrast, the Conservatives lost 677 council seats as well as control of 18 councils in what was their worst local elections performance on record.

Mr Farage said the outcome spelt the end of two-party politics and that his party was now the official “opposition” to Labour – with the Tories having been rendered a “waste of space”.

Read more:
Reform has put the two traditional parties on notice

‘I get it’: Starmer responds after losing Runcorn by-election

Ms Badenoch said she believed the vote for Mr Farage on Thursday was partly down to “protest” but added: “That doesn’t mean we sit back. We are going to come out fighting.

“We are going to come out with the policies that people want to see, but what we are not going to do is rush out and tell the public things that are not true just so we can win votes.

“This is not about winning elections; this is about fixing our country. Yes, of course, you need to win elections to do that, but you also need a credible plan.”

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‘Farage is a force in British politics’

Conservative co-chairman Nigel Huddleston sought to play down the threat from Reform UK, telling Sky News: “When they’re in a position of delivering things, that’s when the shine comes off.”

He told Sunday Morning with Trevor Phillips: “The one thing about Nigel Farage is, and we’re seeing this again and again and again, he is a populist.

“He is increasingly saying everything that anybody wants to hear. He’s trying to be all things to all men.”

“We are establishing ourselves as a credible alternative government based on sound conservative principles and values and our values and our principles, and therefore our policies, will define the future of our party,” he added.

Asked whether the results meant that Labour would now treat Reform as “your most serious opposition”, Health Secretary Wes Streeting told Trevor Phillips: ” I certainly do treat them as a serious opposition force.”

“As I say, I don’t know whether it will be Reform or the Conservatives that emerge as the main threat,” he added.

“I don’t have a horse in that race, but like alien versus predator, I don’t really want either one to win.”

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