Inflation is expected to have stayed stubbornly high in February, an unwelcome sign for the Federal Reserve as it grapples with the prospect of a sharp slowdown in growth as a result of President Trump’s trade war.
The latest reading of the Consumer Price Index, set for release on Wednesday, is forecast to have risen 2.9 percent from a year earlier, according to estimates from economists compiled by Bloomberg. That would represent a 0.3 percent monthly gain, a deceleration from January’s surprisingly large 0.5 percent increase but high enough to keep the central bank on edge about how it handles price pressures.
The “core” measure of inflation, which strips out volatile food and fuel prices to give a better sense of the underlying trend, is also expected to remain high. Economists predict a rise of 0.3 percent compared to the previous month, or 3.2 percent from a year earlier.
The data from the Bureau of Labor Statistics is expected to provide the latest evidence that progress toward the Fed’s goal of 2 percent inflation is has almost come to a standstill. Prices for consumer staples, such as eggs and other grocery items, are rising steeply again, along with services including airfares, hotel costs and automobile insurance.
Economists worry that Mr. Trump’s tariffs and the global trade war they have provoked will not only add to prices, but also dent growth. Uncertainty about the trajectory of the president’s trade policies have amplified those fears.
Those concerns have also materialized in recent measures tracking how consumers feel about the future. According to the latest survey from the Federal Reserve Bank of New York, consumers’ expectations about their financial situation in the year ahead “deteriorated considerably,” as they braced for inflation sticking to around 3.1 percent. The share of consumers now expecting to be in a worse situation financially a year from now rose to its highest point since November 2023. The average perceived likelihood of missing a future debt payment rose to the highest level since April 2020.