The key item on today’s macroeconomic calendar is the February inflation reading in the United States, scheduled for release at 13:30. On one hand, markets see the risk of a short-term rebound in headline inflation, largely driven by energy prices. On the other, expectations still point to a gradual easing of core inflation pressures.
The consensus forecast for February suggests that the Consumer Price Index (CPI) increased by 0.3% month-on-month, compared with 0.2% in January, while the annual inflation rate is expected to remain at 2.4%. For core inflation, economists anticipate a slowdown to 0.2% month-on-month after 0.3% in January, with the year-on-year rate remaining at 2.5%.
Energy Prices Likely to Drive Headline CPI
In practice, the expected acceleration in February’s CPI is largely attributed to higher fuel prices, which began rising even before the escalation of the conflict involving Iran. Economists estimate that gasoline prices within the CPI basket increased by around 0.8%, which should noticeably lift the monthly headline inflation reading.
However, market attention is already shifting toward March data, as the ongoing conflict in the Middle East could keep oil prices elevated and prolong upward pressure on energy costs. Under such conditions, short-term inflation expectations remain highly sensitive to geopolitical developments, even if other components of the CPI basket remain relatively stable.
Core Inflation Pressures Expected to Ease
On the core inflation side, forecasts suggest more moderate price pressures, supported by categories that have recently begun to show clearer signs of slowing price growth.
Lower prices for used cars, weaker airfare prices, and slower increases in rents are expected to limit the pace of core inflation growth.
At the same time, concerns about tariffs and cost pass-through to consumers are gradually intensifying in the background, which may sustain price pressures in selected goods categories.
Prices for clothing and household equipment are expected to rise solidly, as companies increasingly pass the costs of tariffs on to customers. However, this process tends to occur with a delay and unevenly across sectors. It is difficult to expect businesses to absorb these costs indefinitely, particularly when high input costs remain visible in ISM survey signals.
Another factor is the potential introduction of a global tariff of 10%, with the possibility of an increase to 15%, which raises the risk of further price pressure on imported goods and indirectly on domestic substitutes.
Food Prices May React with a Delay
For now, food prices are expected to remain relatively stable, but markets are aware of the risk that the energy price shock could gradually spill over into this category.
If higher oil prices persist, fertilizer and transportation costs will rise, which could eventually push food inflation higher in the coming months. In other words, even if February’s data appear relatively calm, the issue is far from resolved because cost pressures tend to emerge with a delay but can prove persistent.
Limited Impact on the Federal Reserve’s Policy Outlook
From the perspective of the Federal Reserve, the upcoming CPI reading is unlikely to significantly alter the short-term course of monetary policy. The base scenario still assumes that interest rates will remain unchanged at the next policy meeting.
However, it is important to remember that the Fed focuses primarily on PCE inflation, rather than CPI. As a result, even a relatively calm core CPI reading does not necessarily imply that core PCE inflation will show the same moderation.
In the coming weeks, markets are therefore likely to operate under the assumption that short-term inflation risks are concentrated in energy prices and tariffs, while the underlying inflation trend remains sufficiently moderate for the Fed to remain patient—though not necessarily fully comfortable with the outlook.
