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The Consumer Price Index rose 6% year-over-year in February, compared with a 6.4% annual rate in January. On a monthly basis, prices increased 0.4% over January, down a tick from the 0.5% monthly increase from December.
Core inflation, which excludes volatile food and energy prices, rose 5.5% on a year-over-year basis.
The slightly smaller increase in inflation comes as the Fed prepares to meet next week to consider another hike in interest rates. Even though prices are still rising much faster than the central bank wants, some economists expect the central bank to suspend its year-long streak of interest rate hikes as the pace of inflation eases.
With the collapse of two large banks since Friday fueling anxiety about other regional lenders, the Fed, for now, may focus more on shoring up confidence in the financial system than on its long-term drive to tame inflation.
Inflation has come down from a high of 9.1% last June, but the current annual rate of 6.4% is still far above the Fed’s target rate of 2%.
But with some bank stocks rebounding after heavy losses Monday, U.S. markets rebounded in the hours after the inflation numbers were released.
