The latest inflation report just dropped

The Consumer Price Index (CPI), America’s most widely-used measure of inflation, is acting like that one Yung Joc song: it’s going down.

According to Labor Department figures released yesterday, inflation rose 6.0% in February from the same month a year ago. That’s down from 6.4% in January, and the index’s lowest annual figure since September 2021.

🔢 Monthly, by the numbers: The CPI increased 0.4% on a month-to-month basis in February. That rise was driven mainly by a 0.8% increase in shelter costs, which make up more than one-third of the entire CPI.

• The core index, which excludes often-volatile food and energy prices, rose 0.5% month over month, up from 0.4% in January and December.

📸 Big picture: The CPI has now fallen for eight straight months, down from a 40-year high of 9.1% in June. Though there’s still a gap between the current inflation reading (6.0%) and the 2% target the Fed is shooting for, which typically implies more interest-rate hikes are on the horizon.

But, but, but: After the second- and third-largest bank failures in modern US history occurred over the weekend, in part due to factors stemming from higher interest rates, investors now predict a nearly 50% chance that the Fed won’t increase rates following its meeting next Wednesday. That’s up from a 0% chance as recently as last week.