Economic Trends

February Consumer Inflation Holds Steady as Expected

A largely neutral February likely gives the Federal Reserve more reason to maintain interest rates when the group meets on March 17-18.

February U.S. consumer inflation accelerated modestly month-over-month and held steady year-over-year, matching expectations both overall and in core categories.

Figures released March 11 by the Labor Department showed that its Consumer Price Index topline reading rose 0.3% month-over-month and 2.4% year-over-year, following 0.2% and 2.4% in January.

Core inflation — which removes volatile food and energy categories — increased 0.2% monthly and 2.5% year-over-year — in line with Wall Street forecasts. The YoY figure matched the lowest since March 2021.

February’s Producer Price Index figures are set to be reported March 18.

December PPI Rises Sharply as Machinery Wholesalers Expand Margins

Interest Rate Context

With the CPI largely staying put in February, it most likely has a neutral impact on the Federal Reserve in terms of influence toward interest rate policy when it meets for its next Federal Open Markets Committee meeting on March 17-18. The FOMC is largely expected to maintain the current federal funds rate at 3.5%-3.75% rather than cut immediately.