US Inflation Eases to 2.8% in February, Surpassing Projections – One America News Network
OAN Staff James Meyers
8:13 AM – Wednesday, March 12, 2025
Inflation in the U.S. experienced a greater decline than anticipated in February, although price growth remains significantly above the Federal Reserve’s target prior to the central bank’s upcoming policy meeting next week.
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The Consumer Price Index (CPI) increased by 2.8% over the last year, falling short of the 2.9% rise that economists had anticipated, as reported by the Bureau of Labor Statistics on Wednesday.
Both the yearly and monthly inflation rises were lower than what LSEG economists had forecasted.
Core CPI, which omits the more volatile food and energy sectors, stood at 3.1%, marking the lowest reading since April 2021.
Consequently, Dow Jones futures rose by 223 points, or 0.5%, fueled by the latest inflation report. S&P futures climbed by 0.8%, while Nasdaq futures saw an increase of nearly 0.9%.
“Markets affected by tariffs will find some relief this morning, as higher inflation had the potential to exacerbate the situation,” stated Chris Zaccarelli, chief investment officer at Northlight Asset Management, in a note.
On another note, President Donald Trump’s 25% tariffs on steel and aluminum imports were implemented Wednesday morning. In response, Canada imposed a 25% tariff on $20 billion worth of U.S. goods, effective Wednesday morning. Furthermore, the European Union is set to introduce its own retaliatory tariffs in April.
The escalating trade tensions have raised concerns among investors, leading to market instability.
The “Magnificent 7” tech stocks — Microsoft, Apple, Alphabet, Nvidia, Tesla, Meta, and Amazon — have collectively lost over $1.5 trillion in valuation since early 2025.
During February, airline ticket prices dropped by 4%, coinciding with a 1% decline in gasoline prices.
A bird flu outbreak has compelled farmers to cull flocks, resulting in a significant shortage. This outbreak has also caused a staggering 10.4% increase in egg prices in February, based on the latest data.
This information precedes the Federal Reserve’s monetary policy meeting scheduled for next week, where the central bank is predicted to maintain interest rates for the second consecutive meeting amid ongoing uncertainty regarding inflation and the labor market. In its last meeting in February, the Fed kept its benchmark federal funds rate in a target range of 4.25% to 4.5%.
“Today’s lower-than-expected CPI figure is a welcome change, but it is important to note that the Fed is not likely to start cutting rates immediately,” commented Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “The Fed is taking a wait-and-see approach, and given the uncertainty surrounding trade and immigration policies, they will want to observe more than just one month of favorable inflation data.”
At the same time, markets have now assigned a 99% probability of the Fed maintaining its rate position when policymakers convene on March 18th-19th, up from 96% just a day prior and 94% a week earlier, according to the CME FedWatch tool.
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