Headline: US Inflation Remains Elevated, Job Growth Boosted by Trump Policies

Body Copy:

US Economic Resilience

In the opening months of 2025, US inflation continues to exhibit persistence. The consumer price index (CPI), excluding volatile food and energy components, rose 0.3% in January, marking the fifth such increase in the past six months. The annualized core CPI rate stands at 3.1%, slightly lower than December's 3.2%, but marginally above mid-2024 levels.

Meanwhile, the job market has gained significant momentum. Payrolls growth averaged 237,000 in the three months ending in January, the strongest performance since early 2023. This underscores the resilience of the US economy, providing support for the Federal Reserve's decision to maintain current interest rate levels.

Fed Stance and Policy Implications

Fed Chair Jerome Powell will testify before Congress on Tuesday and Wednesday, highlighting the economy's strength as a factor in the central bank's cautious approach to further rate cuts. The Fed also has time to assess the impact of the Trump administration's trade, immigration, and tax policies on the economy.

Proposed Trump policies, including tariffs, have the potential to maintain elevated inflation levels. However, the impact of the administration's policies on the overall economy remains uncertain.

Impact of Trump Policies on Global Economy

Trump's announcement of reciprocal tariffs has raised concerns about their potential impact on both the US and global economies. Brazil is developing contingency plans to mitigate the effects of a possible trade war with the US. The Bank of Canada will release a summary of deliberations that mayshed light on its decision to remove forward guidance from its rate decisions.

Global Economic Highlights

* Asia: China's consumer inflation accelerated in January due to holiday spending, while India reported its weakest economic growth since the pandemic. Indonesia, Vietnam, Malaysia, and the Philippines will release key economic indicators this week.

* Europe, Middle East, Africa: The Bank of England's rate cut and lowered growth forecast will be followed by data on UK GDP and inflation. The European Central Bank's president will testify on Monday, and industrial production figures for the eurozone are due on Thursday. Egypt and Israel are expected to release inflation data.

* Latin America: Brazil's central bank will survey economists' expectations ahead of its January consumer price report. Mexico's economic indicators will be closely monitored for signs of recession risk. Chile's central bank will release minutes of its January meeting, while Peru is expected to maintain its key rate on hold.