The Bureau of Labor and Statistics (BLS) released February’s consumer price index report Tuesday, noting inflation currently sits at 3.2%.
“Inflation increased in February higher than expected, reversing the encouraging easing trend observed in the last quarter of the previous year,” said America’s Credit Unions Dawit Kebede. “Both headline and core prices showed a monthly increase of 0.4%—an annualized rate of 4.8%. The increase in housing and gas prices were the main drivers contributing over 60% of the headline number.
“The Federal Reserve indicated repeatedly that it needs convincing data to show that inflation is heading to its target of 2% before it starts cutting rates. This target is based on the personal consumption expenditures (PCE), which has lower weight on housing and reads lower than this consumer price index (CPI) report. However, the increase in the prices of other service items and commodity prices rising slightly after several months of decline in the CPI report may cause the Federal Reserve to be cautious before starting to cut rates,” Kebede concluded.
