By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. March 12, 2025. Article no 1448.

The recent news about U.S. inflation cooling to 2.8% in February highlights a slight decrease from the previous month’s rate of 3% and marks a deviation from economists’ expectations of a 2.9% increase. 

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in February, after rising 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.8 percent before seasonal adjustment.

This moderation in inflation is attributed to reduced price pressures in essential items like gasoline, groceries, and housing. 

However, concerns persist that President Trump’s tariffs could lead to higher prices in the future, potentially offsetting the current decline in inflation.

Key Points from the February Inflation Report:

Overall Inflation Rate: The Consumer Price Index (CPI) rose by 2.8% annually, down from January’s 3%.

Core Inflation: The core CPI, excluding food and energy, increased by 3.1% over the past year, marking a slight decrease from previous expectations.

Monthly Change: The CPI increased by 0.2% in February, following a 0.5% rise in January4.

Sectoral Changes:

  • Gasoline Prices: Decreased by 1.0% in February.
  • Grocery Prices: Remained flat after previous increases.
  • Shelter Costs: Rose by 0.3%, contributing significantly to the overall increase.
  • Used Car Prices: Increased, while new vehicle prices decreased.

Impact of Tariffs on Inflation

Tariff Effects: Economists predict that Trump’s tariffs will likely keep prices elevated throughout the year.

Projected Impact: Tariffs could add at least 0.5 percentage points to core inflation, depending on how businesses adjust their pricing strategies, reported the Federal Reserve Bank of Boston.

Economic Outlook

Federal Reserve Response: Despite easing inflation, the Fed is unlikely to cut interest rates soon due to ongoing inflation concerns and the potential impact of tariffs. Therefore, the Federal Open Market Committee is not expected to cut interest rates at the conclusion of its next meeting on March 19.

Read also : Gold : Build Your Wealth and Freedom

Market Reactions: Stock markets showed mixed responses to the inflation data, reflecting uncertainty about future economic conditions.

Our community already has nearly 150,000 readers!

Subscribe to our Telegram channel

Follow us on Telegram, Facebook and Twitter

© Copyright 2025 – Eurasia Business News. Article no. 1448.