Inflation Slows in the US: February CPI Hits 2.8%, Core CPI at 3.1% | 2025

Inflation Slows in the US: February CPI Hits 2.8%, Core CPI at 3.1% | 2025 | www.pufin.in

The Consumer Price Index in the United States has decreased by 2.8% annually in February of 2025. It dropped from 3% in January, which was the lowest amount since November 2024, as well as the lowest amount since 2021.  

Reasons:

One of the main reasons that this is happening is because prices are growing slower in the housing sector. In addition, consumers are benefiting from decreasing airfare and fuel prices.   
The consequences of the new tariff can be foreseen, so it is a little tricky to predict their impact on public life.  

Expected Consequences of Tariffs:  

Donald Trump, the president, declared that the information for the next meeting would result in a tariff of 25% on steel and aluminum, but Canada would require an increased tariff up to 50%. This is intended to protect the self-sufficient steel industry, and car makers, as well as beverage makers, will receive unnecessary costs. Usually, both economists and everyday citizens are able to expect negative outcomes, such as inflation, job cuts, and adverse impacts to foreign affairs, which may not benefit any of the parties involved.

Future Predictions:   

The new tariffs have yet to fully reflect the current CPI data, as the tariff on Chinese imports increased from 10% to 20% in February, and further tariffs on imports from Canada and Mexico are in discussion. In upcoming months, these could increase inflation.  

Conclusion:   

Inflation in the US decreased in February 2025, providing some relief for consumers. However, the new tariff policies could lead to higher inflation in future. In this context, the Federal Reserve might maintain stable interest rates, but they will be vigilant about future economic developments.