"The longer that inflation runs above the Fed's target, even if it is due to temporary forces like tariffs, the greater the chance that expectations de-anchor to the upside," said Stephen Juneau, a U.S. economist at Bank of America Securities. "Were that to happen, restoring price stability would be that much harder for the Fed."
Excluding the volatile food and energy components, the CPI climbed 0.2% in February after gaining 0.4% in January. In the 12 months through February, the so-called core CPI increased 3.1% after rising 3.3% in January.
Following the cascade of tariffs, economists have upgraded their inflation forecasts.