Inflation ReportsPublished Mar 12, 2026 · covers Feb 1, 2026

Consumer Prices Rose 0.3% in February, Holding the Same Pace as Most of 2025

4 min read

CPI YoY

2.66%February 2026

Prev 2.83%

The Fed Read

Consumer prices rose 0.3% in February, continuing the same steady pace seen throughout most of 2025 with no sign of cooling. That persistent inflation strengthens the case for the Fed to keep rates right where they are at 3.64%.

For You

Mortgage rates are staying flat because the Fed is holding its benchmark rate steady while prices keep rising at this pace. HYSA yields are also holding flat because banks have no reason to change what they pay savers when the Fed isn't moving rates.

What Happened

Consumer prices rose 0.3% in February, matching the pace from late 2025 and showing no sign of cooling. The Federal Reserve kept its benchmark rate unchanged at 3.64%, and the steady inflation readings help explain why. For anyone watching the cost of everyday goods, the trend is clear: prices are still climbing at a consistent clip. The CPI index climbed to 327.46 in February, up 0.3% from January's 326.588. That monthly pace has been remarkably consistent — prices rose 0.3% in December, September, August, and June of 2025 as well. January's slightly cooler 0.2% reading turned out to be the exception, not the start of a new trend. Looking back over the past year, monthly increases have ranged from near-flat in March 2025 (+0.0%) to 0.3% in most other months, with no sustained downward drift. The PCE Price Index, the Fed's preferred inflation measure, also rose 0.3% in January, confirming the same story from a different angle.

Core Stats

Indicator	Period	Current	Previous
CPI YoY	February 2026	2.66%	2.83%
Core CPI YoY	February 2026	2.73%	2.95%
CPI MoM	February 2026	▲+0.3%	+0.2% (January 2026)
Shelter YoY	February 2026	3.26%	3.38%
Services YoY	February 2026	3.43%	3.64%

Source: Federal Reserve Economic Data (FRED)

Also Worth Noting

Indicator	Period	Current	Previous
CPI Index Level	February 2026	327.46	326.588 (January 2026)
Federal Funds Rate	February 2026	3.64%	3.64% (January 2026)
10-Year Treasury Yield	March 12, 2026	4.27%	4.21%

Source: Federal Reserve Economic Data (FRED)

Market Reaction

Bond yields edged higher following the data, with the 10-year Treasury yield rising to 4.27% from 4.21%. Higher yields reflected traders adjusting to the reality that rate relief wasn't arriving soon. The S&P 500 fell 1.5% to 6,672.62 by mid-March, as equities absorbed the combination of sticky inflation and unchanged Fed policy. The federal funds rate held steady at 3.64%, and markets showed no signs of pricing in a near-term move in either direction.

Signal vs. Noise

Likely temporary (noise):

January's dip to 0.2% briefly suggested cooling, but February snapped back to the prevailing pace
March 2025's near-flat reading (+0.0%) was an outlier that did not repeat in subsequent months

Possible signals:

Monthly CPI increases have clustered around 0.2%–0.3% for nearly a year, suggesting inflation has settled into a steady range rather than declining
The PCE Price Index confirmed the same 0.3% pace, reinforcing that this is broad-based rather than driven by one quirky category
The Fed held rates flat at 3.64%, consistent with a central bank that sees no reason to ease while inflation remains sticky

Pattern to Remember

Historically when inflation stays at a steady pace for many months, the Fed tends to hold rates unchanged.

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Consumer Prices Rose 0.3% in February, Holding the Same Pace as Most of 2025 | Tyche