Inflation Rose 6% in February as Fed Considers More Rate Hikes

The Consumer Price Index (CPI), a measure of inflation, rose by 6% in February compared to the same period last year due to increased uncertainty about the Federal Reserve’s next move to combat rising prices caused by turmoil in the U.S. banking sector. According to the New York Post, prices increased by 0.4% monthly compared to January. Core inflation, which excludes volatile food and energy prices, rose by 5.5% year-over-year. The report aligned with expectations, as economists predicted headline inflation would increase by 6% and core inflation by 5.5% year-over-year.

Food prices remained a pressure point for American households, with the food index surging by 9.5% year-over-year and “food at home” prices by 10.2%. The shelter index, which tracks housing costs, spiked by 8.1% year-over-year and was the primary driver of the annual increase in overall prices, with energy prices rising by 5.2% year-over-year.

Investors anxiously await the latest inflation data amid mounting uncertainty about the Fed’s next policy move. The collapse of Silicon Valley Bank has made the Fed’s decision more difficult, with the bank’s rapid downfall sparking fears of a nationwide run on banks and a systemic meltdown that could upend the broader economy. With the current economic instability, most experts expect the Fed to implement a smaller quarter percentage point hike at its meeting later this month if they raise interest rates.

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