US inflation cooled in February, but Trump’s tariff plans and trade war loom

Inflation slowed more than expected in February and cooled for the first time in four months, but that progress may be short lived as President Donald Trump ramps up his trade war, which threatens to increase prices for Americans.

The Consumer Price Index, which measures price changes across commonly purchased goods and services, was 2.8% for the 12 months ended in February, a cooldown from the 3% annual rate notched in January, according to data from the Bureau of Labor Statistics released Wednesday. On a monthly basis, prices rose 0.2%, versus 0.5% in January.

Economists were expecting inflation to slow for the month amid falling gas prices and continued disinflation in housing-related costs. FactSet consensus estimates called for prices to rise 0.3% from January and 2.9% annually.

US stocks rallied Wednesday after the report was released, bouncing back after three weeks of declines. The Dow gained 140 points, or 0.3%, the S&P 500 rose by 1.1% and the Nasdaq Composite was 1.9% higher.

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