February CPI Marks the Last Pre-War Inflation Reading as Headline Prices Rise 0.3% MoM and 2.5% YoY

February CPI Snapshot:

• Headline CPI rose 0.3% MoM and 2.5% YoY, up from 2.4% in January.
• Core CPI (ex-food & energy) steady at 0.2% MoM and ~2.5% YoY, anchored by moderating rent and used car prices.
• Energy led inflation with gasoline prices jumping ~18% amid Middle East tensions; oil briefly hit $120/barrel.
• Shelter costs remain a major inflation anchor, representing ~34% of CPI.
• Tariff-driven price increases impacted goods like apparel and household items.
• February data largely predates full impact of geopolitical shocks; March CPI expected to reflect sharper energy-driven inflation.
• Rising oil prices risk pushing inflation above 3–4% YoY, complicating Fed policy amid slowing growth.

Inflation risks are shifting from demand to geopolitics. Key indicators to watch: Brent oil prices, gasoline CPI, and transportation costs.

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