U.S. inflation slowed in February as markets await the Fed’s next move.
In February, U.S. inflation showed signs of slowing. The Consumer Price Index (CPI) rose 0.2%, bringing the annual rate down to 2.8%, lower than January’s 0.5% increase.
- Core CPI (excluding food and energy) grew 0.2% month-over-month and 3.1% year-over-year.
- Shelter, which accounts for one-third of the CPI, increased 0.3% monthly and 4.2% annually.
- Food and energy prices rose 0.2%, used vehicle prices increased 0.9%, and apparel climbed 0.6%.
- Egg prices surged 10.4% in February, accumulating a 58.8% increase over the past year.
Market implications:
The Federal Reserve is closely monitoring inflation and the new 25% tariffs on aluminum and steel. Markets expect the Fed to begin rate cuts in May, with a cumulative 0.75 percentage point adjustment by the end of 2025. However, in its next meeting, the Fed is expected to keep rates steady between 4.25% and 4.5%.
Consumer Price Index (CPI) and core CPI (excluding food and energy).
Annual percentage change. Jan. 2021–Feb. 2025.
Source: CNBC
