The Consumer price index for all Urban Consumers (CPI-U) increased by 0.4 percent in February on a seasonally adjust basis, after increasing 0.5 percent in January, the U.S. Bureau of Labor Statistics reported on Tuesday.
The recently released data is showing signs of the possible Federal Reserve decision to increase interest rates. Despite being high, the annual inflation rate has been declining for eight months in a row, after hitting a record high in June, reaching 9.1 percent.
Predictions have been pointing to the Fed increasing its benchmark federal funds rate by 0.25 percent, especially following the recently released CPI numbers.
“Even amid current banking scares, the Fed will still prioritise price stability over growth and likely hike rates by 0.25 percent at the upcoming meeting,” said Jeffery Roach, chief U.S. economist at LPL Financial.
U.S. energy sector costs fell by 0.6 percent, with fuel oil prices dropping by 7.9 percent, food prices increased by 0.4 percent, shelter prices increased by 0.8 percent, and used vehicle prices dropped by 2.8 percent.
U.S. Central Bank is prepared to increase interest rates in order to curb the growing inflation, Fed Chairman, Jerome Powell, told two congressional committees last week. In light of the SVB and Signature Bank crisis, the Fed is expected to be more restrained with the interest rates hike.
