The U.S. annual inflation rate fell from 3% in January to 2.8% in February on a year-over-year basis, slightly below the forecasted rate of 2.9%, according to the U.S. Bureau of Labor Statistics.

Food costs increased by 2.6% in February but other key indicators eased, including gasoline (-3.1%) and shelter (4.2%, down from 4.4% in February 2024). Annual “core” inflation, which excludes those and other volatile metrics, hit its lowest level since April 2021, slowing to 3.1%.

Slowing inflation can be followed by reductions to the target lending rate set by the Federal Reserve Board. But in a recent Wolters Kluwer poll, only 10% of economists predicted the Fed would reduce interest rates in its upcoming March meeting, citing the threat of increased tariffs on vehicles and other imported goods.

Read more at BLS.gov