International News 14 February 2025
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US Consumer Inflation in January 2025 Rises Beyond Expectations
US consumer prices exceeded expectations in January, with the consumer price index (CPI) rising by 0.5%. This has reinforced the Federal Reserve's decision to hold off on further interest rate cuts due to economic uncertainties. The CPI also rose by 3.0% in the 12 months leading up to January, slightly higher than the previous month's increase of 2.9%. Economists had predicted a rise of 0.3% in January and a 2.9% increase over the year. The Bureau of Labor Statistics has made adjustments to reflect price movements in 2024, suggesting that part of the CPI increase may be due to businesses raising prices early in the year and in response to anticipated tariffs on imported goods. Tariffs, when implemented, are expected to further increase inflation, as stated by Fed Governor Jerome Powell.
Trump prepares counter tariffs, trade war tensions rise
US President Donald Trump is finalizing plans for retaliatory tariffs against countries that impose duties on US products, sparking concerns of an escalation of the global trade war and potentially leading to increased inflation within the US. The European Union (EU) has held a meeting to discuss a response to the US tariff policy, with European Commission President Ursula von der Leyen stating that the EU will not remain silent. Germany is advocating for negotiations to avoid a transatlantic trade war but is also prepared with countermeasures if necessary. Trump's previous decision to impose tariffs on steel and aluminum imports faced criticism from Mexico, Canada, and the EU, while Japan and Australia sought exemptions. In addition, Trump has implemented tariffs on goods from China and postponed tariffs on Mexico and Canada.
OPEC has decided to maintain its forecasts for global oil demand growth for the years 2025 and 2026
OPEC has maintained its forecast that global oil demand will continue to grow strongly to 2025, with air and land travel supporting consumption. The organisation expects global oil demand to increase by 1.45 million barrels per day in 2025 and 1.43 million barrels per day in 2026. These projections are in line with previous estimates and at the upper end of industry forecasts. OPEC's outlook differs from that of the International Energy Agency, which expects demand to peak in the next decade as the world transitions to cleaner energy sources. While President Donald Trump's trade policies have created uncertainty in the market, OPEC does not believe they will have a significant impact on economic growth or oil demand in 2025. However, the organisation acknowledges that the extent of the impact of the policies is still uncertain.