Over the last 12 months through January, wholesale prices have risen by 2.9%, that is, since Donald Trump took office at the White House. For the Republican government, this is a sensitive situation because in November, Trump will face midterm elections with a risk, which is becoming increasingly tangible, of losing both chambers of Congress. The data aligns with the warnings that the Federal Reserve (Fed) has issued in recent days. Amid the Federal Reserve's (Fed) warnings about the tariff impacts on inflation, the wholesale price indicators for January reflected increases above what analysts had estimated. This Friday, the Department of Labor reported that the producer price index rose by 0.5% last month, after having increased by 0.4% in December. Economists surveyed by the morning newspaper The Wall Street Journal had expected a 0.3% increase last month. From its headquarters in New York, they shared a study showing that businesses and consumers paid nearly 90% of the tariffs that Trump imposed on various nations, always defending the stance that they would not be passed on to American consumers. Days earlier, the U.S. central bank paused interest rate cuts and sent a much more restrictive message, ignoring Trump's pressures to cut interest rates at a faster pace. A Fed study contradicts Trump: Americans paid nearly 90% of the tariffs. In its minutes, it was revealed that most Fed officials warned that inflationary pressures have not completely dissipated due to the tariffs. Some even fear an inflationary resurgence. Following the release of the minutes, the market projected that the Fed will maintain its monetary pause for longer, a sentiment that strengthens after the release of today's wholesale inflation data. This concern is already reflected in the downturn of stock market indices.
