By Lucia Mutikani
WASHINGTON, March 14 (Reuters) – U.S. consumer prices rose in February amid rising rental housing prices, but economists are divided on whether the rise will be enough to push the Reserve federal government to raise its interest rates again after the failure of two regional banks. .
The consumer price index (CPI) rose 0.4% last month after accelerating 0.5% in January, the Labor Department reported on Tuesday, reducing the annual CPI rise to 6 % in February, the lowest annual increase since September 2021. .
The CPI rose 6.4% in the 12 months to January, while the annual CPI peaked at 9.1% in June, marking the biggest increase since November 1981.
Excluding volatile components such as food and energy, the CPI rose 0.5%, after rising 0.4% in January. In the 12 months to February, the so-called core CPI rose 5.5% after January’s 5.6%.
Economists polled by Reuters expected the CPI and core CPI to rise 0.4% per month. Monthly inflation is rising at twice the rate economists say is needed to bring inflation back to the Fed’s 2% target.
The inflation report was released amid financial market turmoil sparked by the bankruptcies of California’s Silicon Valley Bank and New York’s Signature Bank, which forced regulators to take emergency action to build confidence in the banking system.
Additionally, it was released ahead of the Fed’s policy meeting next Tuesday and Wednesday, and follows a report last Friday that showed a still tight labor market but falling wages.
Economists said Tuesday’s report remained important for policymakers despite financial market angst.
Fed Chairman Jerome Powell told lawmakers last week that the Fed will likely have to raise rates more than expected, leading financial markets to expect a half-year hike. percentage point is on the table next week.
Expectations were lowered to 25 basis points after the jobs report.
With financial markets still expecting a quarter-point rise on Tuesday, according to CME Group’s FedWatch tool, fears of contagion from the banking crisis led some economists, including those at Goldman Sachs, to to expect the Fed to suspend the fastest cycle of monetary tightening since the 1980s.
The Fed has raised its benchmark overnight interest rate by 450 basis points since March last year, taking it from near zero to the current range of 4.50-4.75%.
(Edited in Spanish by Javier López de Lérida)