The Consumer Price Index revealed that headline inflation in the United States rose 0.4% over the last month and 6% over the prior year in February. This is a decline from the 0.5% month-over-month increase and the 6.4% year-over-year rise in January.
Core inflation, which excludes volatile components of food and energy costs, rose 0.5% month-over-month and 5.5% year-over-year. The 6% annual rise of headline inflation is the slowest that has been recorded since September 2021.
While inflation growth has largely slown down, it still remains well above the 2% target that was set by the Federal Reserve in February. Now, the Federal Reserve will look towards the fallout from the recent collapse of Silicon Valley Bank when determining its next interest rate hike.
Experts expect the Federal Reserve to implement a 25 basis point interest rate hike on March 22, down from the 50 basis point hike that was expected before the release of the latest CPI data and the failure of SVB.