US inflation from tariffs that economists feared begins to emerge

US consumer prices increased by the most in five months in June amid higher costs for some goods.

United States inflation rose last month to its highest level since February as President Donald Trump’s sweeping tariffs push up the cost of a range of goods, including furniture, clothing, and large appliances.

Consumer prices rose 2.7 percent in June from a year earlier, the Labor Department said on Tuesday, up from an annual increase of 2.4 percent in May. On a monthly basis, prices climbed 0.3 percent from May to June, after rising just 0.1 percent the previous month.

Worsening inflation poses a political challenge for Trump, who promised during last year’s presidential campaign to immediately lower costs. The sharp inflation spike after the pandemic was the worst in four decades and soured most Americans on former President Joe Biden’s handling of the economy. Higher inflation will also likely heighten the US Federal Reserve’s reluctance to cut its short-term interest rate, as Trump is loudly demanding.

The central bank is expected to leave its benchmark overnight interest rate in the 4.25 percent to 4.5 percent range at a policy meeting later this month.

Trump has insisted repeatedly that there is “no inflation”, and because of that, the central bank should swiftly reduce its key interest rate from its current level. Yet Fed Chair Jerome Powell has said that he wants to see how the economy reacts to Trump’s duties before reducing borrowing costs. Minutes of the central bank’s June 17-18 meeting, which were published last week, showed only “a couple” of officials said they felt rates could fall as soon as the July 29-30 meeting.

Source: aljazeera