US CPI February 2026 Steady Above Fed Target
US CPI February 2026 stayed above the Fed's 2% goal and core prices were steady, shaping traders' expectations for the Fed's rate path.
KEY TAKEAWAYS
- Headline CPI was 2.4% YoY and 0.3% MoM, above the Fed's 2% goal.
- Core CPI stayed 2.5% YoY with a 0.2% monthly gain, signaling persistent underlying inflation.
- Data complicates the Fed's path to easing; a post-Iran oil shock could delay cuts.
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The US Bureau of Labor Statistics said on March 11, 2026, that US CPI February 2026 remained above the Federal Reserve's inflation goal, with core prices steady. The release predates the US-Iran conflict that has since affected oil markets.
February Inflation Readings
The BLS published the "Consumer Price Index News Release - 2026 M02 Results" showing headline CPI rose 0.3% month-over-month (seasonally adjusted) and 2.4% year-over-year for the 12 months ending February 2026, unchanged from January. Core CPI, which excludes food and energy, increased 0.2% month-over-month and 2.5% year-over-year, also steady from January.
Shelter costs contributed to the monthly gain, rising 0.2% month-over-month and 3.0% year-over-year. The food index climbed 0.4% month-over-month and 3.1% year-over-year, with food at home up 0.4% monthly and food away from home up 0.3%. Energy rose 0.6% month-over-month and 0.5% year-over-year; gasoline increased 0.8% monthly but declined 5.6% annually.
Policy and Market Implications
The readings stayed above the Fed's 2% inflation target and matched economist expectations, complicating the central bank's path to easing. Markets priced the fed funds rate near 3.6%, with scenarios including a roughly 50-basis-point cut mid-2026 or one to two cuts by year-end if inflation cools. However, a post-Iran oil shock could delay rate reductions, and some Federal Open Market Committee members noted the risk of rate increases if inflation stalls near 3%.
