Core Inflation Remains at 2.8% in February as Tariff Concerns Loom

The Federal Reserve's preferred inflation measure stays above its 2% target, with new tariffs expected to heighten price pressures and complicate economic policy.

Core PCE inflation, the Federal Reserve's preferred metric, held steady at 2.8% year-over-year in February 2025, according to Commerce Department data.
Headline PCE inflation, which includes food and energy prices, was 2.5% in February, aligning with projections.
The Federal Reserve has maintained interest rates at 4.25%-4.5% since December 2024, citing persistent inflation above its target.
President Donald Trump's tariff policies, including potential reciprocal tariffs, are anticipated to drive inflation higher, adding uncertainty to the economic outlook.
The U.S. personal saving rate fell to 4.6% in February, below the historical average of 5.7%, reflecting potential vulnerabilities in consumer financial health.