U.S. February Consumer Prices Up 2.8% Year-Over-Year, Below Expectations (Summary)

# February U.S. Inflation Falls Below Market Expectations (NEW YORK=Yonhap News) Correspondent Lee Ji-heon - U.S. consumer inflation in February has slowed, coming in below market expectations. However, concerns regarding inflation are expected to persist for a while, as the figures largely do not reflect the tariff effects imposed by the Trump administration. The U.S. Department of Labor reported on the 12th (local time) that the Consumer Price Index (CPI) rose 2.8% in February compared to the same period last year. On a month-to-month basis, the index increased by 0.2%. This marks a slowdown from January, when the CPI had risen 3.0% year-on-year and 0.5% month-to-month. Since falling to 2.4% in September, the inflation rate had been steadily climbing until January, raising concerns about a rebound in inflation. The core CPI, which excludes volatile food and energy prices, climbed 3.1% year-on-year in February, reaching its lowest level since April 2021. On a month-to-month basis, it increased by 0.2%. The core index is considered to better reflect the underlying trend in prices by excluding short-term fluctuations in energy and food prices from the main index. Both the headline and core CPI figures released today were 0.1 percentage points below the forecasts compiled by Dow Jones for both year-on-year and month-to-month comparisons. According to the Department of Labor, housing costs increased by 0.3% from the previous month, accounting for nearly all of the overall monthly index increase. However, decreases in airfares (-4.0%) and gasoline prices (-1.0%) partially offset the rise in housing costs. The February consumer inflation report comes amid heightened market anxiety, fueled by fears that the Trump administration's tariff policies might spur inflation and trigger a recession. This has led to significant declines in the New York stock market. Despite higher inflation expectations based on recent consumer surveys, actual inflation indicators have shown a slowdown, temporarily easing inflation concerns on Wall Street. Nonetheless, some caution that the February figures do not fully account for the effects of the Trump administration's tariffs, indicating that future trends should be closely monitored. Investment bank Goldman Sachs has reflected these inflationary pressures from tariff policies, revising its forecast for the core CPI for the fourth quarter of 2025 upwards from 2.4% to 2.9%. Post the CPI release, Standard & Poor's (S&P) 500 index futures were up 1.1% at 9 a.m., indicating a strong start to the New York trading session. According to CME FedWatch, the probability that the Federal Reserve will hold interest rates steady at the current 4.25-4.50% range at the May Federal Open Market Committee (FOMC) meeting has risen to 68%, up 7 percentage points from the previous day.