Inflation held steady in February — but the latest reading offers little clarity for Federal Reserve officials, who are navigating an increasingly complicated economic landscape.
Consumer prices rose 2.4% from a year earlier, according to new government data released Wednesday, a figure that suggests inflation has been gradually cooling toward the Fed’s 2% target.
But now, a surge in oil prices tied to the war in Iran threatens to undo that progress, and it could keep the central bank in a holding pattern when it comes to interest rates. The Fed’s policy-setting committee will make its next interest rate decision in a week.
“Due to the events in the Persian Gulf policymakers and the public can effectively ignore the February U.S. Consumer Price Index,” wrote Joe Brusuelas, chief economist at RSM. He expected headline inflation could climb back toward 3% in March and 3.5% “or greater” in April as higher energy prices
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