Inflation cooled in January, dropping to lowest level in 9 months
: Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on January 28, 2026 in Washington, (Photo by Kevin Dietsch/Getty Images)
(NEW YORK) — Inflation cooled in January, dropping price increases to their lowest level in nine months and defying fears of a tariff-induced hike in overall costs.
Prices rose 2.4% in January compared to a year earlier, U.S. Bureau of Labor Statistics data on Tuesday showed. The reading came in lower than economists had expected.
Inflation stands at its lowest level since May, but it remains a half-percentage point higher than the Fed’s target rate of 2%.
Affordability remains a concern for many Americans as the political calendar turns closer to election season.
The data arrived days after fresh hiring figures showed stronger-than-expected job growth in January, even though an updated estimate released at the same time indicated a near-paralysis of the labor market last year.
The murky hiring picture marked the latest in a recent series of mixed signals in economic data, which have left observers uncertain about the potential risk posed by elevated inflation alongside sluggish hiring.
Observers closely watched price movements for some household staples, which have faced sharp increases of late.
Coffee prices surged about 18% in January compared to a year earlier, while ground beef prices climbed more than 17% over that span, Bureau of Labor Statistics data showed.
Grocery prices rose at a faster pace than prices overall, climbing 2.9% over the year ending in January, BLS data showed.
Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Federal Reserve in a difficult position.
The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.
The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Fed Chair Jerome Powell said in December.
The Fed held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to the CME FedWatch Tool, a measure of market sentiment.
A gas pump is seen in a vehicle on November 26, 2025 in Austin, Texas. (Brandon Bell/Getty Images)
(NEW YORK) — President Donald Trump has repeatedly touted the opportunity for U.S. companies to extract and sell oil from Venezuela, which holds the largest oil reserves in the world.
“We’re going to be taking out a tremendous amount of wealth out of the ground,” Trump said on Saturday, just hours after a U.S. military attack removed Venezuela President Nicolas Maduro.
Venezuelan oil, however, will likely provide little relief for gas prices paid by Americans over the coming months, analysts told ABC News. They cited the relatively small amount of oil at stake in the near term and the glut of crude already flooding global markets.
A more substantial amount of oil could be accessed over the coming years, leading to a potentially noticeable decline in prices at the pump, they added. But that outcome remains uncertain, since oil companies face significant political and logistical hurdles in Venezuela, while wider market conditions could shift in the meantime.
“I would not expect to see a sharp drop because of this event,” Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, told ABC News.
Oil executives are set to meet with President Donald Trump at the White House on Friday to discuss investments in Venezuela, a White House official confirmed to ABC News.
Venezuela boasts the biggest proven oil reserve of any country, amounting to roughly 303 billion barrels or about 17% of the world’s reserves, according to the U.S. Energy Information Administration, or EIA, a federal agency.
For decades, however, the nation has struggled to match those holdings with similarly stratospheric output due to lackluster infrastructure and government mismanagement.
Venezuela exported about 749,000 barrels per day last year, totaling less than 1% of global supply, according to data and analytics company Kpler.
In a social media post on Tuesday, Trump said Venezuela would hand over 30 to 50 million barrels of oil to the U.S., which in turn would sell them at their market price. The resulting funds — as much as $2.8 billion at current prices — will “benefit the people of Venezuela and the United States,” Trump said.
Trump has not provided details about the timing of such sales.
The plan proposed Tuesday would likely have little or no effect on U.S. gasoline prices, analysts told ABC News. The amount of oil stipulated by Trump is relatively small, making up the equivalent of between one-third and half of the oil consumed worldwide in a single day, according to data compiled by the EIA.
“Short term, I don’t think we’ll see much of an impact,” Tucker Balch, a finance professor at Emory University, told ABC News. “It’s not a lot of oil right now.”
Even more, oil prices are hovering near their lowest levels since 2021, meaning it will prove difficult to bring prices down further anytime soon, analysts added. Low oil prices stem from a glut of oil alongside relatively slow global economic growth, which has constricted demand for fossil fuels.
“There’s an oversupply and weak demand. More crude won’t make a big difference in the overall price,” Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News.
After the military operation, Trump outlined a long-term role for U.S. oil companies in Venezuela, saying the firms would spend money to improve the nation’s infrastructure and output.
“We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure,” Trump said during a press conference on Saturday at his Mar-a-Lago residence in Palm Beach, Florida.
A U.S.-led effort to extract and sell the massive Venezuelan oil reserves could inject a substantial amount of oil into global markets and noticeably reduce gasoline prices, some analysts said.
Venezuelan oil production topped out at 3.5 million barrels per day in the 1990s, Kpler said. A return to that output would amount to about 4% of global oil supply, S&P’s Joswick, adding that the influx could push down gasoline prices.
“Prices are set on the margin and small imbalances in volume can lead to large shifts in prices,” Joswick said.
A long-term venture would encounter challenges, however, some analysts said.
The infrastructure necessary to ramp up oil production would require tens of billions of dollars of investment over several years, while oil companies involved in the effort would face political risks, according to analysts.
Chevron is currently the only U.S. oil firm operating in Venezuela, as part of a joint venture with the country’s state-owned oil outfit.
ExxonMobil and ConocoPhillips stopped doing business in Venezuela in 2007, after former President Hugo Chavez nationalized the sector. Citing the unlawful seizure of assets belonging to the two oil giants, the World Bank’s International Center for Settlement of Investment ordered Venezuela to pay the firms billions of dollars. Venezuela has only paid a small share of the debt it owes to ExxonMobil and ConocoPhillips.
The policy approach in Venezuela is uncertain over the coming years, while the same goes for the U.S. as a presidential election approaches in 2028, Krishnamoorti said.
“It’s unlikely the oil companies are going to take the bait to go after some significantly difficult oil to produce in a very uncertain U.S. policy and global policy situation,” Krishnamoorti added.
Joswick noted, however, that possible success in accessing Venezuelan oil over the next few years could be a “big incentive for the continuation of similar policies.”
While touting potential U.S. oil interests in Venezuela, the Trump administration has described the operation as a law enforcement function rather than a military attack.
Maduro and his wife, Cilia Flores, are among six defendants named in a four-count superseding indictment that accused them of conspiring with violent, dangerous drug traffickers for the last 25 years. Maduro was indicted on related charges in 2020. He has long denied all the allegations, and he pleaded not guilty on Monday. Flores also pleaded not guilty.
So far, the major oil firms have yet to speak publicly about Trump’s plans.
In a previous statement to ABC News, ConocoPhillips said the firm is keeping tabs on the ongoing situation.
“ConocoPhillips is monitoring developments in Venezuela and their potential implications for global energy supply and stability. It would be premature to speculate on any future business activities or investments,” the company said.
Chevron said it continues to focus on its current operations.
“Chevron remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations,” it said in a statement.
ExxonMobil did not respond to a request for comment.
Grocery Store Shopping Supermarket (Oscar Wong/Getty Images)
(NEW YORK) — Consumer sentiment ticked higher in February for the second consecutive month as inflation fears appeared to ease, though shopper attitudes remained well below levels registered a year ago, University of Michigan data on Friday showed. The reading exceeded economists’ expectations
At its low point in November, consumer sentiment fell close to its worst level since a pandemic-era bout of acute inflation. Modest gains in recent months indicate some positive momentum for shoppers.
Year-ahead inflation expectations dropped from 4% in January to 3.5% in February, the data showed. The outcome anticipated by respondents would put inflation above its current level of 2.7%.
The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve’s target rate of 2%.
Despite these challenges, some major economic indicators remain upbeat.
In the fall, shoppers helped propel the fastest quarterly U.S. economic growth in two years, federal government data in December showed.
Meanwhile, a relatively small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the U.S. Bureau of Labor Statistics said, putting unemployment at a low level by historical standards.
Turmoil in markets this week, however, has prompted concern among some observers about the financial outlook.
Some major tech stocks plummeted in recent days after Anthropic unveiled an artificial intelligence tool viewed by some investors as a potential replacement for widely-used software products.
The price of bitcoin plunged more than 10% on Thursday, sinking the world’s largest cryptocurrency to its lowest level since October 2024 and erasing sizable gains made since then.
Geopolitical conflict also looms amid negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing war between Russia and Ukraine, as well as persistent tensions between the U.S. and Iran.
In recent weeks, Trump has threatened tariffs against Canada, South Korea and eight European countries, invoking the tool as means of exerting pressure over a range of foreign-policy issues.
Venezuelan President Nicolas Maduro (center) is celebrated by participants at a rally marking the anniversary of a battle on the day Venezuelan opposition leader Machado was awarded the Nobel Peace Prize. (Jesus Vargas/picture alliance via Getty Images)
(NEW YORK) — Oil prices jumped about 3% after President Donald Trump this week threatened to blockade all sanctioned oil tankers traveling in and out of Venezuela.
Venezuela, which has the largest known oil reserves in the world, exports hundreds of thousands of barrels of oil each day.
The threatened blockade risks a reduction of global oil supply and an amplification of geopolitical uncertainty — both of which could further push up oil prices and, in turn, pinch drivers at the pump, some analysts told ABC News.
But, they added, the effect on prices will likely remain muted unless the conflict escalates significantly, since Venezuela accounts for less than 1% of global oil output and most of its oil is sold on the black market.
Here’s what to know about what the threatened U.S. blockade means for oil and gasoline prices:
Where does the blockade stand and how has Venezuela responded? On Tuesday, Trump threatened what he called a “blockade” of all sanctioned oil tankers traveling in and out of Venezuela, ratcheting up pressure on the Venezuelan President Nicolas Maduro, whose government depends in part on revenue derived from oil sales.
“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” Trump wrote in a social media post. “It will only get bigger, and the shock to them will be like nothing they have ever seen before.”
A day later, Maduro said Venezuela would continue to trade oil, defying Trump’s threat.
“Trade in and out will continue — our oil and all our natural wealth that by the constitution and Bolivar’s legacy belongs — our wealth, our land, and our oil — to its only legitimate owner, which for centuries and centuries has been our sovereign people of Venezuela,” Maduro said on Wednesday, originally in Spanish.
The U.S. currently has 11 warships in the Caribbean — the most in decades — but even with an increased military presence, that would likely not be enough to put in place a blockade in the traditional sense, which involves sealing a country’s coastline completely and would effectively have been a declaration of war.
Why has the threatened blockade pushed up oil prices? The threatened blockade of sanctioned oil tankers drove up the U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices — by about 3%, landing the price around $56.50 per barrel.
The measure had dropped to its lowest level since 2021 on Tuesday, just hours before Trump’s announcement. The dip in prices stemmed from a glut of oil alongside relatively slow global economic growth, which has constricted demand for fossil fuels.
“Everybody and their grandmother is bearish on oil prices,” Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, told ABC News.
The threatened blockade disrupted those price doldrums, at least to a minor degree, some experts said.
Venezuela has exported about 749,000 barrels per day this year, with at least half that oil going to China, according to data from Kpler. That oil output amounts to less than 1% of global supply.
The news caused a “knee-jerk reaction” in oil markets due to heightened uncertainty tied to the U.S.-Venezuela conflict, Christopher Tang, a professor at the UCLA Anderson School of Management who studies supply chains, told ABC News. A continued standoff could push oil prices up to around $65 or $70 per barrel, but they’re unlikely to go much higher, Tang added.
“It’s not going to go up to $100 a barrel,” Tang said.
What could the threatened Venezuelan oil blockade mean for gas prices? A jump in oil prices typically brings about an ensuing uptick in the cost of gasoline at the pump, some experts said, since crude oil makes up the key ingredient in auto fuel.
“The single most important price driver of gasoline is crude oil. As crude oil goes up, we expect gasoline to go up,” Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.
The average price of a gallon of gas stands at about $2.88, which marks a 5% decline from a year earlier, AAA data showed. Gas prices are hovering near their lowest level in four years due in part to the low cost of crude oil.
