US inflation stabilized before the Iranian crisis. What will happen to the rate?

The Consumer Price Index (CPI), which reflects the dynamics of the cost of goods and services in the U.S. economy, rose by 0.3% in February in monthly terms and by 2.4% in annual terms. This was fully in line with the expectations of economists surveyed by Dow Jones, CNBC reports. In January, annualized CPI growth was 2.4%; last December, it was 2.7%. The previous peak value of the index was recorded in September 2025, when its growth exceeded 3%.

Core CPI, which excludes volatile food and energy prices, rose 0.2% in February from the previous month and 2.5% from a year earlier. It was also in line with Wall Street forecasts

While the war with Iran has caused oil prices to surge over the past week, economists note that CPI data for February was collected before the conflict in the Middle East began and does not reflect a jump in energy prices, MorningStar writes. "This data is from before the latest escalation of conflict in the Middle East occurred, so it won't give us much information about how prices are starting to react to what's going on. This will become a dynamic already for March and April," explains Josh Jamner, senior investment strategy analyst at ClearBridge Investments.

A different viewpoint is held by Wells Fargo senior economist Sarah House: she believes that although the conflict in the Middle East began in late February, oil and gasoline prices began to rise last month "in anticipation of escalation," writes Reuters.

While inflation remains high, there has been a slowdown in the annualized rate of inflation - after spiking last fall. According to Jamner, the February CPI report continued the trend seen in the January data: "For the past three to five years, inflation has been well above target. Price levels remain high, but the pace of price increases has slowed and stabilized." The inflation target set by the U.S. Federal Reserve is 2% annualized, MorningStar writes.

Wells Fargo analyst Osong Kwon wrote the day before, March 10, that the February employment report - according to which the number of jobs in the U.S. last month fell by 92,000 instead of the expected growth of 50,000 - only increases the importance of inflation data. His opinion is quoted by CNBC. "Last week's weak Non-Farm Payrolls (NFP) figure adds to the pressure on subsequent macroeconomic data. In our view, even in the event of a possible de-escalation of the war with Iran, the S&P 500 index will be capped at the 7,000 level until either the Fed moves to looser policy or economic growth accelerates again," he wrote in a research note.

According to Jamner, the release of consumer price data is unlikely to have a significant impact on the Fed's stance ahead of next week's March meeting. According to him, the regulator is now in a wait-and-see mode and seeks to get clearer price signals after the conflict in the Middle East.

Bank of America analysts expect the conflict with Iran is likely to be short-lived. However, they believe that if the fighting drags on, it could lead to a "more sustained rise" in oil prices. "In the short term, higher oil prices are likely to keep the Fed from changing policy. But if rising energy prices begin to weigh on final demand, the Fed is likely to take a softer stance in the medium term," the Bank of America analysts wrote.

Prior to the release of February inflation data, traders, according to the FedWatch market sentiment monitoring tool, estimated the probability of the interest rate remaining at the current level following the Fed's March 18 meeting at 99%. After the release, this indicator remained virtually unchanged.

Futures on the Dow Jones Industrial Average were down less than 0.1%. Futures on the S&P 500 were losing 0.2%, while futures on the Nasdaq 100 were broadly unchanged.

On March 11, the international oil benchmark Brent rose by 3.6% to $90.1 per barrel. Oil of the U.S. Mark West Texas Intermediate rose by 3.9% - to $86.7 per barrel.

The spot price of gold fell 0.3% to $5190 an ounce, while silver fell 2.6%, approaching $86.

This article was AI-translated and verified by a human editor