War in Iran sent inflation soaring
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The February personal consumption expenditures price index rose in line with estimates, but doesn't reflect the Iran war's latest impact on inflation or consumer spending.
WASHINGTON, April 9 (Reuters) - U.S. inflation increased as expected in February and likely rose further in March amid the war with Iran, a trend that is expected to discourage the Federal Reserve from cutting interest rates for a while.
M/M vs. +0.3% consensus and +0.4% prior, according to data released by the Bureau of Economic Analysis on Thursday.
The Federal Reserve is faced with a very difficult decision that could make or break the stock market.
The latest government release, echoed across major financial outlets, put the month-on-month PCE increase at roughly 0.4%. According to the Bureau of Economic Analysis, the PCE price index rose 0.4% in February and the 12‑month change moved up to about 2.
The Fed’s preferred inflation gauge, the core PCE price index, climbed 3.0% year-over-year in February. This figure was consistent with the forecast and reflected a slowdown from January's 3.1% reading. On a monthly basis, core PCE rose 0.4%, as expected.
The core Personal Consumption Expenditures price index rose 3% over 12 months through February, remaining above the Federal Reserve's 2% target for nearly five years.
The Commerce Department on Friday released the February 2026 PCE inflation report, which showed the Federal Reserve's preferred inflation gauge remained stubbornly high for consumers.