US inflation rate continues to climb easing Fed fears over interest rate hike

 
Joe Hall
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Cheez-It 355 at The Glen
Flying high: Consumer prices continue to rise (Source: Getty)

US inflation continued to climb in January to a rate of 1.4 per cent, beating analysts' expectations.

The rise will abate fears that the Federal Reserve increased rates prematurely in December ahead of a period of market volatility and weak economic data.

Read more: US inflation rate climbs to highest since 2014

Consumer prices increased compared to the 0.7 per cent year-on-year gain recorded for the month prior.

Cleveland Federal Reserve President Loretta Mester said the she expects the Fed will still continue its "gradual" pace of rate increases, with the US economy expected to bounce back from recent turbulence.

"My current expectation is that the US economy will work through this episode of market turbulence and the soft patch of economic data to regain its footing for moderate growth," she explained.

"Solid labour market indicators, including strong payroll growth, and healthy growth in real disposable income suggest that underlying US economic fundamentals remain sound."

Consumer prices, excluding volatile food and energy components, rose 0.3 per cent in January - their biggest gains since August 2011.

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