US Inflation Matches Estimates as Core CPI Hits Four-Year Low

Key Facts

1Core CPI YoY reached 2.45%, the lowest level since March 2021.

2Headline CPI rose 0.3% MoM and 2.4% YoY, matching market estimates.

3The shelter index was the largest factor in the monthly increase, rising 0.2%.

4The energy index increased 0.6% in February, with expectations of a larger impact in March data due to Iran-related oil spikes.

The US Bureau of Labor Statistics reported that consumer price inflation for February met market expectations, reinforcing the ongoing disinflation narrative. Headline CPI rose 0.3% on a monthly basis and 2.4% year-over-year, aligning perfectly with analyst estimates. Notably, the annual Core CPI slowed to 2.45%, marking its lowest level since March 2021 and signaling a cooling in underlying price pressures. While the shelter index remained the primary driver of monthly gains with a 0.2% increase, the energy index also rose by 0.6% during the period. Analysts warn that geopolitical tensions involving Iran could lead to a more significant impact on energy costs in the upcoming March data. Overall, the data supports expectations for the Federal Reserve to maintain or lower interest rates, providing a boost to equities and gold while weighing on the USD.