Federal Reserve Chair Jerome Powell said the latest consumer price data show that while the central bank has made substantial progress toward taming inflation, there is still more work to do.

Higher inflation readings left Fed officials telling lawmakers, business executives and the public that they may be waiting longer than they had thought for relief from high interest rates.

Grocery prices were up by 0.5% compared to December, with a nationwide outbreak of bird flu being the likely culprit. The average price of a dozen Grade A eggs reached a new record high last month as farmers have been forced to liquidate their flocks.

The unexpected rise in price pressures prompted futures traders to increase the odds that the Federal Reserve will hold the benchmark rate at its current range beyond May.

Surprisingly strong U.S. inflation in January stoked investor fears that a heating economy and looming tariffs could corner the Federal Reserve, undercutting interest rate-cut hopes and even raising the threat of a hike.

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U.S. consumer prices in January increased by the most since August 2023 with Americans facing higher costs for housing and food, reinforcing the Federal Reserve's message that it was in no rush to resume cutting interest rates amid growing uncertainty over the economy.