forex factory — Consumer price growth was steady in February, right before the Iran war rattled global energy markets and sent prices skyrocketing. The consumer price index rose 0. 3% month over month and 2. 4% from one year ago, while core inflation, excluding food and energy, rose 0. 2% month over month and 2. 5% year over year. February’s report was produced before the United States and Israel launched a large-scale attack on Iran on the final day of the month, a shift that has sharply changed the near-term inflation picture.
Forex Factory: Key numbers and energy shock
The February consumer price index showed several notable moves: grocery prices rose 0. 4% from January and are tracking a 2. 4% increase from a year ago; “food away from home” rose 0. 3% from January and is up 3. 9% year over year. Clothes and shoes rose 1. 3% on a month-over-month basis. Utility gas services jumped 3. 1% in the month. Fruits and vegetables climbed 1. 4% in February, and a number of meat products also saw price increases. The category covering appliances and household furnishings is up 3. 9% year over year.
The timing of the report matters: it predates a large-scale attack on Iran that effectively shut down the Strait of Hormuz, a waterway through which more than 20% of the globe’s supply of oil typically transits. Since the first strikes, the price of U. S. crude oil has increased by more than 20%, and retail gasoline prices have risen by more than 50 cents. Those energy moves follow the steady February CPI read and have already altered the inflation trajectory outlined in the report.
Immediate reactions
Principal Asset Management’s Seema Shah called the February CPI “already something of a historical artefact. ” Seema Shah wrote that “with oil prices up roughly $30 in recent weeks — and potentially heading toward triple digits — investors are far more focused on how the conflict feeds into inflation over the months ahead. “
The Supreme Court also changed the policy landscape in February by striking down many of President Donald Trump’s country-specific emergency tariffs; President Donald Trump then replaced some of those tariffs with a global 10% duty. The impact of those tariff shifts on consumer prices is not yet clear. With the latest report, consumer inflation remains north of the Federal Reserve’s 2% target annual rate, though it has come down from a high of 3% in September.
What’s next
Markets and policymakers now face two overlapping uncertainties: how the Iran war and the effective closure of the Strait of Hormuz will push energy prices in the months ahead, and how tariff adjustments will filter through to consumer goods. Observers should expect inflation data published after these energy shocks to reflect higher energy costs and potential pass-through to a range of consumer categories. The near-term focus described by Seema Shah will shape attention on incoming monthly reports and on how traders using headlines such as forex factory interpret rapidly changing price signals.
