US consumer prices rise less than expected, all eyes on Powell’s speech on March 19

The Bureau of Labor Statistics has released the US inflation numbers for February 2025. 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. Over the last 12 months, the all items index increased 2.8 percent, after rising 3.0 percent over the 12 months ending January.

The index for all items less food and energy rose 0.2 percent in February, following a 0.4-percent increase in January. The all items less food and energy index rose 3.1 percent over the last 12 months.

Core consumer prices in the United States, which exclude items linked to food and energy, rose by 0.2% from the previous month in February of 2025, from the 10-month high of 0.4% in the previous month, below market expectations of a 0.3% increase.

Prices fell for transportation services (-0.8% vs 1.8% in January) and rose at a slower pace for shelter (0.3% vs 0.4%), used cars and trucks (0.9% vs 2.2%), and medical care commodities (0.3% vs 0.5%). From the previous year, core consumer prices rose by 3.1%, slowing slightly from the 3.3% jump in the previous month.

Markets were predicting a 0.3% monthly increase in the headline Consumer Price Index, with an annual inflation rate cooling to 2.9%, and a core CPI increase of 0.3% resulting in an annual rate of 3.2%.

In January, US CPI increased 0.5% monthly and 3% annually, while the core-CPI rose 0.4% monthly and 3.3% annually.

US stock futures are in green after the US CPI data for February were released and the markets are expected to open with all indices showing gains.

Since January 2025, markets have been under pressure due to the uncertainty created by Trump’s tariff policies.

From this point on, the situation becomes intriguing: Powell has stated time and time again that the Fed will not lower rates quickly unless data dictates it, despite Trump’s desire for him to do so.

Now, as inflation seems to be trending lower, it will be interesting to see whether Powell waits or cuts rate in March FOMC meeting.

All eyes are on the US Fed’s FOMC meeting this month on 18-19. Powell’s press conference will be a keenly watched event as markets will look for cues and direction of rates in the year ahead.