U.S. Inflation Rises in February, Challenging Rate Cut Expectations

Higher rent and gas prices contribute to a solid increase in consumer prices, casting doubt on the anticipated Federal Reserve rate cut in June.

U.S. consumer prices rose 0.4% in February, driven by higher costs for gasoline and shelter, marking a solid increase from January's 0.3%.
The annual consumer price index (CPI) increased 3.2% through February, slightly up from 3.1% in January, indicating persistent inflation.
Core CPI, excluding volatile food and energy components, also rose 0.4% last month, with a year-on-year increase of 3.8%, the smallest since May 2021.
Economists and analysts suggest the inflation data could lead the Federal Reserve to delay expected rate cuts, possibly extending the pause past March and May.
Despite the uptick, some experts still anticipate a disinflation trend, though the recent data challenges the narrative of a swift return to the Fed's 2% target rate.