U.S. Inflation Stable Before Oil Shock

U.S. consumer price inflation remained stable in February, rising 2.4% over the 12 months, matching the previous month's rate, according to data released on Wednesday. This stability occurred prior to significant increases in global oil prices driven by the U.S. and Israel's conflict in Iran. Rising food and housing costs were balanced by declines in other sectors, such as used cars.

The February figures do not reflect the recent surge in energy prices, which has seen the average cost of a gallon of U.S. car fuel exceed $3.50, reaching its highest point since 2024. Analysts project this could push the inflation rate above 3% in the coming months. This development introduces uncertainty regarding potential interest rate cuts by the U.S. Federal Reserve, which has maintained rates above its 2% target since 2021 to curb inflation.