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Overall consumer prices rose a moderate 0.2 percent in February. NAFCU Chief Economist and Vice President of Research Curt Long said inflation is expected to pick up this year and the Federal Reserve is likely to raise interest rates during its meeting next week.

"Inflation is expected to pick up this year in light of a tightening labor market, the tax stimulus and potentially tariffs," Long said in a NAFCU Macro Data Flash report Tuesday. "The Fed is widely expected to raise rates later this month, and the odds are increasing that we will see four or more quarter-point rate hikes this year."

For the 12-month period, overall consumer price index (CPI) rose 2.3 percent, which is the highest rate since last March. In January, CPI rose 0.5 percent.

Data published by the Bureau of Labor Statistics show that core prices (excluding food and energy costs) increased 0.2 percent in February compared to the previous month. Year-over-year core CPI growth ticked up to 1.9 percent.

Energy prices increased 0.1 percent in February following a 3 percent increase in January. From a year ago, energy prices were up 8 percent. Food prices were essentially unchanged in February. Year-over-year growth of food prices decelerated to 1.4 percent.

"Apparel prices rose sharply for the second consecutive month in February, while prices of new vehicles declined by 0.5 percent, the biggest drop since 2009," Long added.