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5d ago

U.S. Inflation Holds at 2.4% in February Before Oil Shock Threatens Rebound

Markets now overwhelmingly expect the Fed to hold steady next week, reflecting concern that the oil surge will lift upcoming inflation.

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Overview

  • The Consumer Price Index rose 2.4% year over year in February and 0.3% from January, matching forecasts, according to the Bureau of Labor Statistics.
  • Core CPI remained at 2.5% annually and increased 0.2% on the month, with shelter up 0.2%, food up 0.4%, and energy up 0.6% including an 11.1% jump in fuel oil.
  • February’s readings predate the recent conflict-related spike in crude, with Brent up roughly 25% and WTI about 30%, pushing U.S. gasoline prices higher in recent days.
  • Economists caution that March CPI and the Fed’s preferred PCE gauge are likely to show the energy shock’s impact, with some projections pointing to a higher headline rate if oil stays elevated.
  • CME FedWatch shows about a 99% probability the Fed keeps rates at 3.5%–3.75% on March 17–18, and traders have scaled back expectations for near-term cuts.