Inflation Comes in Hotter Than Expected

An inflation gauge closely watched by the Federal Reserve remained high last month even before the impact of most tariffs has been felt, per the AP.

• Friday's report from the Commerce Department showed that consumer prices increased in 2.5% in February from a year earlier, matching January's annual pace. Excluding the volatile food and energy categories, prices rose 2.8% compared with a year ago, higher than January's figure of 2.7%.
• That "core inflation" mark of 2.8% was higher than the 2.7% expected, notes CNBC, and Wall Street wasn't thrilled. Dow futures were down more than 100 points. For the month, core inflation rose 0.4%, also above expectations of 0.3%.

• Inflation remains a top economic concern for most Americans, even as it has fallen sharply from its 2022 peak.
• President Trump has slapped 20% tariffs on all Chinese imports, 25% import taxes on steel and aluminum, and on Wednesday said he would hit imported cars with another 25% duty. Most economists, and the Federal Reserve, now expect inflation to tick higher this year as a result of the tariffs. Fed Chair Jerome Powell last week said elevated inflation from the tariffs could be temporary. But he also added the outlook was unusually uncertain given the swift changes in policy from the White House.
• Consumer and business confidence in the economy has fallen sharply since Trump began rolling out tariffs, and a measure of Americans' outlook for the future of the economy dropped to a 12-year low on Tuesday. Many polls find that most of the public sees the economy as fair or poor. A survey last month by the Pew Research Center found that 63% of Americans still see inflation as a "very big problem."

(More inflation stories.)