Wall Street cheered Wednesday after an inflation report showed prices rising 0.2% in February, down slightly from the previous month and lower than expectations.
The Consumer Price Index report showed all items increased 2.8% in the 12 months ending in February, or cooler than the annual rate of 3% reported for January. Lower gas prices and housing-related costs were big factors in the change.
Grocery prices also started to flatline. Egg prices rose 10.4% in February compared to 15.2% in January, though egg costs remain high and are up 58.8% compared to last year.
Investors responded positively to the update. Major indexes traded in positive territory after the opening bell.
The White House also took a victory lap.
“Today’s CPI report shows inflation is declining and the economy is moving in the right direction under President Trump,” White House press secretary Karoline Leavitt said on X. “This inflation report, much like last week’s jobs report, is far better than the media predicted and the so-called ‘experts’ expected. When will they learn to stop doubting President Trump? As he successfully did in his first term, President Trump is driving down costs through massive deregulation and energy dominance.”
However, the economic future remains uncertain given Mr. Trump’s aggressive trade plans. Wall Street experienced a three-week sell off fueled by on-again, off-again tariff plans, and the White House plans to impose sweeping tariffs on an array of nations by April.
Easing inflation would make it easier for the Federal Reserve to cut interest rates this year. At the same time, tariff-driven price increases could make the central bank think twice about rate cuts.
Mr. Trump says he is shaking off a Biden-era economy and things will improve once Republicans pass tax cuts and slash regulations.
Democrats, meanwhile, say Mr. Trump promised to cut prices on “day one” but hasn’t shown enough progress.
“Fifty-one days into the Trump administration, and I’m still waiting to see a real plan to lower costs for American families,” said Rep. Brendan Boyle, Pennsylvania Democrat. “Instead of delivering on their promises, Donald Trump and his Republican allies are pursuing policies that do the exact opposite — driving up costs on everyday essentials while betraying the middle class they claim to champion.”
