Core consumer prices, excluding food and energy, rose by 3.3% in January 2025 compared to the previous year, indicating persistent inflation concerns.

Traders have adjusted their expectations, predicting that the Federal Reserve will not cut interest rates until at least September 2025, with only one quarter-point reduction anticipated this year.

Donald Trump has been vocal about the need for lower interest rates, criticizing the Biden administration for the current economic challenges and asserting that 'rates must go down'.

White House Press Secretary Karoline Leavitt acknowledged the economic difficulties inherited from the previous administration while Trump allies propose new strategies to combat inflation.

The uncertainty surrounding tariffs, particularly on steel and aluminum, poses risks to business confidence, hiring, and investment.

Following the inflation report, U.S. stock futures fell approximately 1% across major indexes, indicating a negative market response and raising concerns about potential interest rate hikes.

Economists warn that inflationary pressures could be at their highest level in decades, with some suggesting that disinflation may no longer be possible.

While oil prices are currently stable, their unpredictability complicates future economic forecasts.

Higher interest rates typically reduce liquidity, which could negatively impact speculative assets like Bitcoin.

Federal Reserve officials remain cautious about cutting rates further, awaiting more evidence of declining inflation before making any decisions.

Fed Chair Jerome Powell emphasized the strength of the economy and solid labor market, allowing the Fed to maintain its current restrictive policies to control inflation.

Upcoming economic indicators, including the producer price index and U.S. import and export price indexes, are expected to significantly affect Wall Street and the broader economy.