In February, annual inflation slowed to 2.8%, down from 3% in January, signaling a slight easing that may benefit homebuyers and mortgage rates. Despite rising housing costs that accounted for nearly half of the inflation figure, falling prices in categories like gasoline and airfare provided some offset. The Federal Reserve's upcoming decisions remain relevant, especially with concerns about a housing supply gap of 3.8 million homes impacting costs. Although the recent inflation data is encouraging, experts emphasize caution in interpreting it as a trend.
Overall prices rose 2.8% in February from a year earlier, a slowdown from the 3% increase recorded in January, according to the Labor Department's consumer price index data released on Wednesday.
With recession worries rising, attention will be focused on this inflation reading, and today's data offer a nice counterpoint to last month's higher-than expected figures.
Policymakers do not overreact to one or two readings that are higher or lower than anticipated, explained Fed Chair Jerome Powell.
Financial markets are predicting that the Fed will again leave rates unchanged at their current range of 4.25% to 4.5%, despite the latest inflation reading coming in cooler than expected.
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