Inflation Stalls While Fuel Prices Soar Amid Tense Middle East

U.S. Inflation Holds Steady While Energy Prices Surge

The U.S. inflation rate remained unchanged in February, matching economists’ forecasts.

• Consumer Price Index (CPI): 2.4 % YoY, just above the Federal Reserve’s 2 % target.

Energy Costs Skyrocket

• Gasoline: up over 3 % from January.
• Oil: >30 % rise since late last month, now near $86 per barrel.
• Average U.S. gallon: ~$3.53, up from ~$2.92.

Food Prices Outpace Overall Inflation

• Food CPI: 3.1 % YoY, keeping pace with February’s earlier rise.

Labor Market Signals Strain

• Unemployment rate: 4.3 % → 4.4 %.
• Job losses: 92,000 in February (reversal of prior gains).

Economic Growth Slows

• GDP (Q4 2025): 1.4 % annualized, down from 4.4 %.
• Higher energy costs and sluggish growth threaten the Fed’s dual mandate.

Policy Dilemma

• Lowering rates could spur growth but risk higher inflation.
• Raising rates may tame prices but further slow the economy, leaving policymakers in a tight spot.