The Shopper Worth Index (CPI) elevated by 0.2% in February month-on-month, under economists’ expectations of 0.3% uptick and slower than January’s 0.5% rise, based on knowledge launched by the U.S. Bureau of Labor Statistics.
Headline annual inflation eased to 2.8% from 3.0% within the prior month.
Key Factors:
- Headline CPI fell from 2.8% to three.8% year-on-year, because the month-to-month print confirmed a 0.2% uptick versus the projected 0.3% achieve
- Core inflation (excluding meals and vitality) rose 0.2% month-over-month, under the 0.3% consensus forecast, bringing annual fee down from 3.3% to three.1%
- Shelter prices elevated 0.3%, accounting for almost half of the month-to-month CPI enhance
- Airline fares plunged 4.0%, considerably contributing to the softer headline determine
- Gasoline costs decreased 1.0%, however general vitality index rose 0.2% attributable to will increase in electrical energy and pure fuel
Hyperlink to official U.S. CPI Report (February 2025)
The February report confirmed moderation throughout a number of key parts. Shelter inflation, which has been a persistent driver of general inflation, elevated at a extra modest tempo of 0.3%. A key contributor to weaker than anticipated readings was the 4% stoop in airline fares.
Meals costs rose 0.2% in February, with meals away from residence rising 0.4% whereas meals at residence remained unchanged. Inside the meals class, there have been notable will increase in meat costs, with beef rising 2.4% and eggs surging 10.4%.
Market Response
U.S. Greenback vs. Main Currencies: 5-min
Overlay of USD vs. Main Currencies Chart by TradingView
The U.S. greenback initially weakened towards most main currencies following the report’s softer than anticipated outcomes, as merchants elevated bets on potential Federal Reserve fee cuts later this 12 months.
USD/CAD skilled probably the most notable decline, dropping 0.39%, whereas USD/GBP fell 0.33%. The New Zealand and Australian {dollars} additionally strengthened towards the dollar, with USD/NZD and USD/AUD falling 0.24% and 0.27% respectively.
Apparently, USD shortly recovered from its post-CPI dip and even maintained energy towards safe-haven rivals CHF and JPY, with USD/JPY even rebounding previous its pre-CPI ranges lower than an hour after the discharge. The greenback bounced increased versus EUR nearly instantly after the report, though a broader-based selloff adopted just a few hours later when the market highlight returned to commerce tensions.
