Inflation rate rose at a 2.8% annual rate in February, CPI report shows. Here’s what that means.

Inflation rose 2.8% on an annual basis, slightly lower than economists had forecast but continuing to signal that price hikes remain elevated despite the Federal Reserve’s efforts to tame inflation to a 2% annual rate. 

By the numbers

The Consumer Price Index was forecast to rise 2.9% last month, according to economists polled by financial data firm FactSet. The CPI, a basket of goods and services typically bought by consumers, tracks the change in those prices over time. 

February’s data comes after inflation accelerated in January, when it rose 3% on an annual basis. 

What economists say

Grocery prices continue to increase, creating a financial pinch for many households, economists note. Food inflation has been “gradually accelerating since mid-2024, reaching almost 5% on a 3-month annualized basis” in January, according to Morgan Stanley economists in a March 6 research note. 

Egg prices are to blame, but also beverages, fruits and vegetables are pricier as well, they noted. 

On top of that, President Trump’s tariff barrage has the potential to boost prices for many products, from food imports to automobiles, adding to an uncertain outlook for inflation, economists say. 

“There has been little in the way of progress on inflation — as measured by the Consumer Price Index — since the middle of last year and now there are worries that tariffs could add another layer of price increases,” said Bankrate chief financial analyst Greg McBride in an email. “The CPI will remain a closely watched economic release for months to come.”