CPI

The Consumer Price Index (CPI) data release for February, published by the US Bureau of Labor Statistics (BLS), is scheduled for March 14 at 12:30 GMT.

The Consumer Price Index (CPI) declined to 6.0% year on year from February 2023's 6.4%. The basket of goods and services included in the CPI is intended to reflect the purchases of the typical urban consumer and is adjusted periodically to take into account shifts in consumer spending. EUR/USD has lost its traction and declined to the 1.0700 area in the early American session on Tuesday. Gold price came under renewed bearish pressure and declined to the $1,900 area in the American session. The Consumer Price Index, published by the Bureau of Labor Statistics, is a gauge of the average change in prices of a set basket of goods and services bought by households. The Consumer Price Index (CPI) data release for February, published by the US Bureau of Labor Statistics (BLS), is scheduled for March 14 at 12:30 GMT. The US CPI data will hold the utmost relevance, as the Federal Reserve remains committed to bringing down inflation back to its 2.0% target. Meanwhile, the headline CPI data is seen easing to 0.4% MoM in February, compared with a 0.5% increase reported in January. Economists from Wells Fargo agree with the consensus and expect headline inflation numbers to remain high this time around: “We look for another monthly increase of 0.4% in the overall CPI in February, which would put the YoY rate at 6.0%. [Price Index](https://www.fxstreet.com/economic-calendar/united-states) (CPI), declined to 6% on a yearly basis in February from 6.4% in January. The US Dollar's immediate reaction to February inflation data is mixed. [Follow our live coverage of the market reaction to US inflation data.](https://www.fxstreet.com/macroeconomics/economic-indicator/cpi)

Investors were closely watching the Consumer Price Index (CPI) report today after the failure of two regional banks resulted in stock markets being jittery.

Today’s report indicated that the CPI index rose at a slower pace of 0.4% in February on a seasonally adjusted basis, after rising by 0.5% in January. The index for shelter made up 70% of the increase in CPI and was the largest contributor to the monthly all-items increase. In light of this reality, it is possible that the Fed will now halt its tightening cycle.” EST, March 14 following the CPI report. In the year through January, CPI grew at 6.4%. In addition, the jobs market last week indicated that

Inflation eased on an annual basis but rose in February over the prior month. The Federal Reserve must decide whether to continue raising interest rates ...

“The bank failed to provide reliable data and created lack of confidence in the bank’s leadership,” she said. Harris said that state officials in her department began to grow uneasy with some of the data the bank supplied over the weekend. They worked with the bank’s executives to try and shore up its liquidity amid a rising number of withdrawal requests, but it wasn’t enough to support letting the bank open for business on Monday. Powell](https://www.nytimes.com/2023/03/08/business/economy/fed-chair-inflation-interest-rates.html), said that [the Fed](https://www.nytimes.com/2023/03/13/business/economy/federal-reserve-interest-rates.html) would remain dependent on economic data as it weighs its plans — and suggested that the door was open to a larger-than-expected rate move. “The Fed’s financial stability and inflation objectives might be in tension now, which is why it is especially important to use the right tools for the right job,” Mr. The sudden government seizures of New York-based Signature Bank and Silicon Valley Bank in recent days have rocked the business world. The Fed also announced an [emergency lending program ](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm)to help funnel cash to banks that are facing steep losses on their holdings because of the change in interest rates. Credit Suisse, which is in the middle of a sweeping restructuring plan, said it was working to address those concerns. One week ago, investors were bracing for the Fed to raise rates by a full percentage point through July and then hold them at that high point for most of the year. “If the Fed follows the implied pricing of the market, there is a risk that inflation pressures become entrenched, which could lead to more financial instability later,” he wrote. Typically that would garner a strong response from the Federal Reserve, resulting in even higher interest rates that typically weigh on the stock market. That complicates the Federal Reserve’s decision on whether to continue raising interest rates while the banking system is in turmoil.

The consumer price index showed firm inflation pressures, but that might not keep the Fed from pausing rate hikes amid bank woes. S&P 500 futures rose.

In February, the CPI proxy for core nonhousing services saw prices rise a hefty 0.6% on the month, while the 3-month annualized inflation rate accelerated to 6.7%. But that jumped to 88% after the CPI inflation data, with just 12% odds of no hike. February's CPI showed services less rent of shelter prices rising just 0.1% on the month and 6.9% from a year ago vs. Health care is a glaring one, since it accounts for nearly 16% of PCE spending, while medical services amounts to less than 7% of CPI budgets. This CPI category covers just 29% of consumer outlays, while PCE core nonhousing services covers 50% of household spending. The core CPI inflation rate peaked at a 40-year-high 6.6% in September. The S&P 500 slipped 0.15% on Monday, closing at a two-month low. The CPI inflation rate eased to 6%, down from 6.4% in February and in line with forecasts. Wall Street views the CPI gauge of services less rent of shelter as a reasonably close proxy, but it has serious shortcomings. But the CPI report's methodology focused on health insurer profits from the previous year doesn't yield a timely, useful data point. The annual core inflation rate unexpectedly held at 5.5% vs. While persistently high inflation might support the case for a rate hike next week, Fed officials may still punt as they try to shore up confidence in the banking sector.

Inflation remains elevated but the temperature is coming down, according to the latest Consumer Price Index.

On the other, it needs time to investigate the effect of recent bank collapses on financial conditions and wants to minimize the risk of further financial instability,” according to Buber. “They need to be careful in balancing the risks of price and financial stability.” On the one hand, it wants to maintain credibility on inflation and avoid core inflation accelerating further. Overall food prices were up 9.5% for the 12 months ending in February, representing the lowest annual rate for the category since April. When stripping out volatile energy and food prices, core CPI grew 0.5% on a monthly basis and 5.5% year over year. It’s up 8.1% year over year. Prices for food at home (grocery purchases) were up 10.2% in February, the lowest since March 2022. [recent stress in the banking sector](https://www.cnn.com/2023/03/13/investing/silicon-valley-bank-collapse-explained/index.html). “This is going to still take a while to return to numbers that we’re all comfortable with. Economists were expecting a gain of 0.4%. Shelter prices were up 0.8% for the month and 8.1% year over year. [Federal Reserve’s campaign](https://www.cnn.com/2023/03/07/economy/powell-congressional-testimony-inflation/index.html) to bring down high prices has grown even more [complex](https://www.cnn.com/2023/03/13/investing/sheila-bair-svb-fed-rates/index.html) in recent days.

Excluding volatile food and energy prices, core CPI increased 0.5% in February and 5.5% on a 12-month basis.

That set off a wave of speculation that the Fed could be teeing up a 0.5 percentage point hike next week. "While only moderately higher than consensus, in the pre-SVB crisis world this may well have pushed the Fed to hike 50bp at its March meeting next week. Because of the housing expectations, Fed officials have turned to "super-core" inflation as part of their toolkit. Fed officials largely expect housing and related costs such as rent to slow over the course of the year. The Fed targets inflation at 2%. A decrease in energy costs helped keep the headline CPI reading in check. "It typically takes six months for new rent data to be reflected in the CPI. The report along with Wednesday's producer price index will be the last inflation-related data points policymakers will see before they meet March 21-22. Meat, poultry, fish and egg prices fell 0.1% for the month, the first time that index has retreated since December 2021. Heading into the release, markets had widely expected the Fed to approve another 0.25 percentage point increase to its benchmark federal funds rate. Excluding volatile food and energy prices, core CPI rose 0.5% in February and 5.5% on a 12-month basis. Treasury yields, which plummeted Monday amid fears over the banking industry's health, rebounded solidly, pushing the policy-sensitive [2-year note](/quotes/US2Y/) up 30 basis points to 4.33%.

Data showed that U.S. Consumer Price Index (CPI) rose 0.4% in February versus 0.5% a month ago. On a yearly basis, it rose 6.0% last month, compared with 6.4% ...

Its stock advanced 7.3%. "(Investors) are seeing a coordinated effort with various government agencies, and with hindsight, they’re feeling as if things have contained themselves a bit." [(UAL.O)](https://www.reuters.com/companies/UAL.O) fell 5.4% after the commercial carrier unexpectedly forecast a [current quarter loss](/business/aerospace-defense/united-airlines-shares-fall-after-dour-forecast-expenses-slowing-demand-2023-03-14/). [(FRC.N)](https://www.reuters.com/companies/FRC.N) and Western Alliance Bancorp [(WAL.N)](https://www.reuters.com/companies/WAL.N) surged by 27.0% and 14.4%, respectively, in a reversal of the previous session's rout. banking system, continued to reverberate throughout the sector. [(UBER.N)](https://www.reuters.com/companies/UBER.N) and Lyft Inc [(LYFT.O)](https://www.reuters.com/companies/LYFT.O) rose 5.0% and 0.6%, respectively, after a California state court [revived a ballot measure](/world/us/california-court-rules-drivers-can-be-contractors-win-uber-lyft-wsj-2023-03-13/) allowing the companies to treat drivers as independent contractors rather than employees. [(META.O)](https://www.reuters.com/companies/META.O) [announced](/technology/facebook-parent-meta-lay-off-10000-employees-second-round-job-cuts-2023-03-14/) 10,000 job cuts in its second round of layoffs. [(.SPLRCL)](https://www.reuters.com/quote/.SPLRCL) enjoying the largest percentage advance. [(.DJI)](https://www.reuters.com/quote/.DJI) rose 336.26 points, or 1.06%, to 32,155.4, the S&P 500 [(.SPX)](https://www.reuters.com/quote/.SPX) gained 64.8 points, or 1.68%, to 3,920.56 and the Nasdaq Composite [(.IXIC)](https://www.reuters.com/quote/.IXIC) added 239.31 points, or 2.14%, to 11,428.15. [(.KRX)](https://www.reuters.com/quote/.KRX) rose 2.1%. [(.SPXBK)](https://www.reuters.com/quote/.SPXBK) reclaimed territory, rising 2.6% after Monday's plunge, its biggest one-day drop since June 2020. [(.SPXBK)](https://www.reuters.com/quote/.SPXBK) coming back from its steepest one-day sell-off since June 2020.

February inflation data will be an important indicator of the Federal Reserve's rate hike plan following the stunning collapse of Silicon Valley Bank.

Why it matters: The economy has proven resilient against rate hikes, with inflation bolstered by a strong labor market and persistent consumer demand. That ...

- It's also the case for used cars and trucks, where prices fell 2.8% in February, though private sector wholesale price data suggests rising costs might eventually appear in CPI. Private sector data points to receding prices, but disinflationary forces have yet to show up in official figures. That includes medical care services, which fell 0.7% last month. - On the flip side, items that are putting downward pressure on inflation might prove to be fleeting. - "They need higher rates to fight inflation, but higher rates could continue to spark problems in the banking sector." - Shelter costs continue to be a huge factor in upward inflation pressures: The category contributed 0.3 percentage points to core inflation's 0.5% monthly increase in February.

News of the slight 0.4% increase in the Consumer Price Index (CPI) announced today combined with large banks shutting down has mortgage industry experts ...

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12-month U.S. inflation for February came in at 6.0% and 5.5% once food and energy are stripped out. Rising home prices drove much of the increase and the ...

Still the unique treatment of shelter costs within the CPI calculation is increasingly responsible. Nonetheless, the Fed’s decision at their next meeting to set interest rates on March 22 is further complicated by the banking crisis. Illustratively, if shelter costs were flat in the CPI data, then monthly inflation would be running at a level much closer to the Fed’s target, although annual inflation would still some take time to trend down. Even assuming flat monthly shelter costs may be inaccurate at a time when industry sources see declining home prices and rents. Assuming that happens, the inflation picture could look different. Shelter costs ran at 0.8% month-on-month for February and 8.1% year-on-year per the CPI’s data.

Year-over-year CPI, or the "inflation Rate," came in at +6.0%, just as expected, and 40 bps lower than January.