Inflation eases in February

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