Today, the Bureau of Labor Statistics reported an increase of February CPI of 0.4% over the previous month, and 3.2% over the prior year in February.
January CPI reported a monthly increase of 0.3% and 3.1% annual gain.
This marked the largest monthly increase since September.
Energy prices, which are one of the main reasons of the increase in headline inflation, rose following several months of declines, buoyed by gas prices. The index increased 2.3% in February after falling 0.9% in January.
Gas prices climbed a significant 3.8% from January to February after falling 3.3% the previous month. This was largely due to seasonality and a pullback in US refinery utilization.
The food index increased 2.2% in February over the last year, with food prices holding steady from January to February. The index for food at home also held steady over the month after rising 0.4% in January.
On a “core” basis, which strips out the more volatile costs of food and gas, prices in February climbed 0.4% over the prior month and 3.8% over last year, mainly due to price increased in apparel, recreation, and used cars and trucks.
Both measures were higher than economist expectations of a 0.3% monthly increase and a 3.7% annual gain.
The Markets began the year betting on six cuts starting in March, only to revert to three cuts starting in June following cautious commentary from Fed Chair Jerome Powell and a slew of other Fed officials, along with higher-than-expected readings on inflation.
Analysts believe that February CPI will not instill more confidence among the Federal Reserve members that inflation is on a sustainable path toward their 2% objective, and they believe that the FED will not change the interest rate next week, but it will do the first cut in June.