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Tipsheet

The February Inflation Report Is Here

The February Inflation Report Is Here
AP Photo/Mark Schiefelbein

Inflation held steady in February, coming in at 2.5 percent, the lowest since March of 2021, as inflation remains above the Fed's two percent target rate. 

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According to the Bureau of Labor Statistics, the consumer price index (CPI), which broadly measures everyday goods, rose 0.2 percent from January and 2.5 percent over the past year. However, stripping away both food and energy prices, which typically are the most volatile, prices rose only 2.4 percent. 

The price of food increased by 0.4 percent for the month and was up 3.1 percent from a year ago. Prices for meats, poultry, and fish rose 6.8 percent from a year ago, while egg prices fell 42.1 percent as the impact of an avian flu outbreak, which affected supply, has continued to wane. Meanwhile, the fruits and vegetables index increased 1.4 percent month over month and is 2.7 percent higher than a year ago. 

Energy prices were up 0.6 percent since January, but only 0.5 percent over the last year. Gasoline prices were up 0.8 percent month over month but were down 5.6 percent compared with last year, while electricity costs fell by 0.7 percent in February but are up 4.8 percent over the past year.

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Experts have expressed concern that despite the steady inflation report, Operation Epic Fury, and uncertainty in the Middle East, could complicate policy decisions from the Federal Reserve, which they said is unlikely to cut rates as a result of the inflation report.

"A steady inflation reading would probably be a welcome data point on any other day, but against the current backdrop of geopolitical uncertainty and surging oil prices, it may not carry as much weight in the markets – or with the Fed," Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said. "Despite the prospect of releasing oil reserves, continued uncertainty translates into continued upside risk for oil prices, and that translates into a Fed that will remain cautious about cutting interest rates."

It remains unclear how the operation will affect March's report.

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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