Donald Trump's early presidency is marked by a stark contrast to the optimism following his election. With key economic indicators showing rising inflation and declining confidence on Wall Street, experts express concern over the impact of his policies. Inflation has surged for five consecutive months, prompting doubts about effective disinflation. Specialists note that while adjustments are typical in January, persistent inflationary pressures signal a tougher journey ahead, compelling the Federal Reserve to remain cautious as they approach policy decisions in 2025.
Investors and citizens had been forewarned of Trump's electoral promises, but reality is imposing caution, if not outright concern, in the face of economic measures that have dispelled initial optimism.
January marked the fifth consecutive month of rising headline inflation, reaching levels not seen since June, with core inflation moderating slightly, yet rebounding to 3.3%.
Experts at CaixaBank Research believe that January’s inflation data point to persistence and rebound of inflationary pressures, cautioning that the last mile to disinflation will not be an easy road.
While the PCE index provided some relief with a slight decline, the underlying inflation rate signals that the Fed will continue to take caution ahead of 2025.
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