The inflation rate in the U.S. dropped to 2.8% in February, slightly lower than the expected 2.9%. The consumer price index (CPI) increased by 0.2% for the month, a smaller rise than in January. Core inflation, which excludes food and energy, also rose 0.2%, bringing the annual core inflation rate to 3.1%, its lowest level since April 2021.

The decline in inflation is a relief for consumers and businesses worried about the impact of tariffs on prices. The cost of shelter, which makes up a large part of the CPI, rose 0.3%, while food and energy prices increased 0.2%. Egg prices, however, soared by 10.4%, leading to a 58.8% increase over the past year. Used car prices jumped 0.9%, while airline fares dropped by 4%.

The Federal Reserve is closely watching inflation trends as it decides on future interest rate cuts. Economists expect the Fed to begin cutting rates in June. Meanwhile, trade tensions continue, with President Trump’s new tariffs on steel and aluminum taking effect. Despite concerns about economic growth, the White House remains optimistic about the economy’s direction.

Source: CNBC