CPI inflation February 2023: - CNBC

Inflation rose in February but was in line with expectations, likely keeping the Federal Reserve on track for another interest rate hike next week despite recent banking industry turmoil.

Heading into the release, markets had widely expected the Fed to approve another 0.25 percentage point increase to its benchmark federal funds rate.

That probability rose following the CPI report, with traders now pricing in about an 85% chance that the Fed will hike the rate by a quarter point, according to a CME Group estimate.

"Even amid current banking scares, the Fed will still prioritize price stability over growth and likely hike rates by 0.25% at the upcoming meeting," said Jeffrey Roach, chief U.S. economist at LPL Financial.

Fed Chairman Jerome Powell last week told two congressional committees that the central bank is prepared to push rates higher than expected if inflation does not come down.

It is a sign of how much things have changed in the very near term that 50bp is almost certainly still off the table for March," wrote Krishna Guha, head of global policy and central bank strategy for Evercore ISI.