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On a seasonally-adjusted basis, overall consumer prices rose 0.4 percent in February, with the overall consumer price index (CPI) growing 6 percent year-over-year. NAFCU Economist Noah Yosif analyzed the data in a new Macro Data Flash report.

"The laggard decline in headline and core CPI affirms recent indications that inflation remains persistent, buttressed by strong, albeit moderating, employment and wage growth,” noted Yosif. “However, with heightened market volatility emanating from the traditional banking sector, the Federal Reserve will most likely prioritize financial stability as the more immediate concern relative to inflation, balancing these issues by enacting a quarter-point hike while extending the timeline of its overall tightening cycle.”

Core prices (excluding food and energy costs) rose 0.5 percent compared to the previous month. Year-over-year core CPI growth was 5.5 percent.

Energy prices rose 0.6 percent during the month. From a year ago, energy prices were up 5 percent. Food prices rose 0.4 percent in February and are up 9.5 percent compared to this time last year.

“This shock does raise the risk of a recession; however, such an event would be more likely to materialize if the Federal Reserve were forced to assume an elongated pause in the current tightening cycle against inflation, rather than from an independent crisis driven by increased market pessimism and turbulence,” concluded Yosif.

For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.