11 March 2026
If you are covering the latest US inflation data, please see the following comment from Lindsay James, investment strategist at Quilter:
“Today’s US inflation print reveals CPI rose 2.4% in the 12 months to February and 0.3% on the month, with core inflation holding relatively steady at 2.5%. Given oil prices only began to edge higher last month, we can expect a much larger impact to come through in the March data.
“With the US economy expected to run hot into mid-term elections, alongside tax rebates, a focus on cost-of living and pressure on the Fed to cut interest rates, companies may feel able to push a greater proportion of tariff costs onto end consumers. We’re already seeing importers of clothing, footwear and household goods lifting prices at a quicker pace, with apparel rising 1.3% in February, and that may continue in the months ahead.
“That said, there are some offsetting forces. Used car prices and transportation costs have helped soften overall inflation - although the latter may see a sharp reversal as we move into the spring and summer months.
“Regardless of today’s figures, the Federal Reserve is widely expected to hold rates next week. Markets are working on the assumption that no further cuts will take place during Powell’s tenure as Chair, and attention is instead turning towards the arrival of Kevin Warsh later in the spring. However, the degree to which the Fed will look through rising energy costs is uncertain, and investors are not fully pricing in the next quarter point rate cut until September, despite concerns that the latest jobs report revealed cracks in the idea of a strong US economy. That has inevitably reopened the conversation about stagflation, though we are still quite some distance from that scenario.
“Extreme cold weather across the US will have had an impact on short term data, while the earnings picture remains robust and the economy continues to enjoy a significant boost from ever growing levels of AI-related capital expenditure. As ever, the outlook will depend on factors beyond the Fed’s control, with the duration of the latest Gulf conflict and its impact on energy flows the most significant.”
