US Inflation Edges Up in February but Consumer Spending Sees Uptick

• US inflation ticked higher in February to 2.5% annually, reversing some recent progress in lowering inflation • However, core inflation excluding food and energy slowed slightly to 2.8%, and monthly price increases slowed as well • Consumer spending accelerated in February by 0.8%, the biggest monthly rise in over a year • This spending growth may not be sustainable as consumers have drawn down pandemic savings • The latest data is unlikely to shift the Fed's plans to cut rates eventually, but may keep rates higher for longer