Inflation Rate Higher Than Expected, Likely to Be Bad News for Interest Rates

Inflation Rate Higher Than Expected, Likely to Be Bad News for Interest Rates

The consumer-price index climbed 6.4% in January from a year earlier, down from 6.5% in December, the Labor Department said Tuesday.

Economists were predicting the rate to drop to 6.2% or lower.

The inflation rate is likely to cause further action by the Federal Reserve. Fed Chair Jerome Powell has repeatedly said he wants to see inflation pushed down to 2%.

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This marks the seventh straight month of cooling in annual inflation since peaking at 9.1% in June, the highest reading since 1981.

The stock market responded poorly to the new CPI numbers — the Dow Jones Industrial was down as much as 300 points in morning trading.