Inflation Heats Up in February, Raising Questions on Fed Rate Cut Timing
• CPI rose 0.4% in February, higher than expected, driving inflation up 3.2% over the last 12 months • Core CPI, excluding food and energy, was up 0.4% showing continued embedded inflation • Gold prices dropped on the news to $2,179/oz as hotter inflation could mean more Fed rate hikes • Some economists still expect the Fed to start cutting rates in June due to disinflationary pressures • Markets see over 70% chance of a June rate cut but March CPI data could shift Fed tone