Surprise Used-Car Price Jump Adds to Fed’s Inflation Worries

A surprise jump in used-vehicle prices last month is adding to US car buyers’ frustration and has the potential to dent hopes inflation is headed lower even as the Federal Reserve hikes interest rates.

The 2.5% rise in average used-vehicle prices in January from December retraced some of last year’s 15% decline, according to data from Manheim. The prices at auctions tracked by the company often are a bellwether for the new-car market, so consumers have had reason to believe automakers and dealers will start discounting vehicles that have never been so expensive.